Julie Cameron-Doe:

Thank you, operator. And good afternoon, everyone. On the call with me today are Craig Billings; and Brian Gullbrants in Las Vegas. Also on the line are Linda Chen, Frederic Luvisutto, and Jenny Holaday. I want to remind you that we may make forward-looking statements under Safe Harbor federal securities laws and those statements may or may not come true. I will now turn the call over to Craig Billings.

Julie Cameron-Doe:

Thank you, Craig. At Wynn Las Vegas, we generated $230.3 million in adjusted property EBITDA on $628.7 million of operating revenue during the quarter, delivering an EBITDA margin of 36.6%. Lower than normal table games hold negatively impacted EBITDA by around $5 million in Q2. OpEx, excluding gaming tax per day was $4.2 million in Q2 compared to $3.7 million in the prior year period. The increase was primarily due to union-related payroll increases, along with higher variable costs due to increased volumes across the business. Turning to Boston, we generated adjusted property EBITDA of $62.1 million on revenue of $212.6 million with an EBITDA margin of 29.2%. As Craig alluded to, our table game hold was below normal during the quarter. And if we normalize hold in both periods, EBITDA would have increased approximately 2% year-on-year. We've stayed very disciplined on the cost side with OpEx per day of $1.15 million, flat year-on-year and down sequentially. The team has done a great job mitigating union-related payroll increases with cost efficiencies in areas of the business that do not impact the guest experience. Our Macau operations delivered adjusted property EBITDA of $280.4 million in the quarter on $885.3 million of operating revenue, hold was a mixed bag in the quarter as higher than normal hold at Palace was more than offset by lower than normal hold at -- Wynn Macau, particularly in our mass table business. All in, we estimate hold negatively impacted EBITDA, the combined properties by around $3 million during the quarter. EBITDA margin was 31.7% in the quarter, an increase of 250 basis points, relative to Q2 2019. Our OpEx, excluding gaming tax was approximately $2.5 million per day in Q2, a decrease of 19% compared to $3.2 million in Q2 2019, and down 3% on a sequential basis. The team has done a great job of staying disciplined on costs, and we remain well-positioned to drive strong operating leverage as the market continues to recover. In terms of CapEx in Macau, we're currently advancing through the design and planning stages on several of our concession commitments. And as we noted, the past few quarters, these projects require a number of government approvals, creating a wide range of potential CapEx outcomes in the near-term. As such, we continue to expect CapEx related to our concession commitments to range between $350 million and $500 million in total, between 2024 and the end of 2025. Moving on to the balance sheet, our liquidity position remains very strong with global cash and revolver availability of over $3.9 billion as of June 30th. This was comprised of $2.2 billion of total cash and available liquidity in Macau, and $1.7 billion in the US. During the quarter, we continued to reduce gross debt, repaying approximately $170 million on our bank facilities, and we have now reduced companywide gross debt by more than $1.1 billion over the past year. The combination of strong performance in each of our markets globally, with our properties generating nearly $2.4 billion of trailing 12 month property EBITDA. Together with our robust cash position creates a very healthy consolidated net leverage ratio of just over four times. Our strong free cash flow and liquidity profile allows us to reduce leverage while returning capital to shareholders in both the US and Macau. To that end, the Wynn Resorts Board approved a cash dividend of $0.25 per share, payable on August 30, 2024, to stockholders of record as of August 19, 2024. We also opportunistically repurchased approximately 741,000 shares for $68 million during the quarter. Similarly, in June, Wynn Macau paid a dividend of $0.075 cents per share or US$50 million, highlighting our commitment to prudently returning capital to shareholders. Finally, our CapEx in the quarter was $94 million, primarily related to the villa renovations and food and beverage enhancements at Wynn Las Vegas, concession related CapEx in Macau, and normal course maintenance across the business. Additionally, as Craig noted, we contributed $356.5 million of equity to the Wynn Al Marjan Island project during the quarter, bringing our total equity contribution to date to $514.4 million, split approximately $300 million for Wynn Al Marjan and a little over $200 million for the Marjan land bank and related infrastructure. We estimate our remaining 40% pro rata share of the required equity is approximately $900 million, fully loaded for capitalized interest fees and certain improvements on the island. Importantly, as Craig noted, we've also made meaningful progress on the debt financing for the project with significant interest from a diverse group of banks both locally in the region as well as internationally. We expect the financing will be completed later this year, and we will update you in due course. With that, we will now open up the call to Q&A.

Carlo Santarelli:

Hey, thank you. Good afternoon, everybody. Craig, you spoke a little bit about Las Vegas, the comfort you're seeing, the trends in July, acknowledging obviously August booking window is short, September some group on the books, and fourth quarter probably very limited visibility at this point outside of the group bookings. How would you characterize kind of the back half of the year, and could you talk a little bit about kind of that group footprint that's already in place?

Brian Gullbrants:

Sure. Thanks, Craig. Carlo, Q3 continues to pace very well. It's solid. August and September look even better than July. And when we look to Q4, pacing well for the year will be the best year we've ever had in group and convention. And 2025 seems to be pacing actually ahead of that, all with strong ADR growth. So the sales team has done a phenomenal job, and our yield management team and revenue management continues to yield because of that strong base, so it helps all segments. So I think we're in solid shape and we're encouraged by what we're seeing.

Craig Billings:

Thanks, Carlo. Well, as you know, you've followed the company for a long time. We're not programmatic buyers of the stock, and we tend to buy back more when it is particularly cheap. So you're right. To that end, we did purchase in the quarter and we continued to purchase into July and actually the first few days of August, actually. We still have some $365 million of capacity under the Board authorization. We're really balancing all of our liquidity needs between capital deployment for growth, the UAE, potentially other greenfield markets, delevering slightly and returning capital to shareholders through dividends and share repurchases. Fortunately, we're in a position to do all of that. And so as you rightly know, it's really a question of quantum, and we'll continue to be opportunistic about it.

Operator:

Thank you. Our next question is from Joe Greff with JPMorgan. You may go ahead.

Craig Billings:

Thanks, Joe. Well, to your second question first, there's always a relationship given the way that GAAP requires you to book rooms revenue associated with the casino. There's always a relationship between casino volumes, quality of customers and room rates. With respect to retail -- the retail component of non-gaming, I think the situation with respect to luxury retail in China is hopefully well understood. I think you've seen a lot of the large luxury retailers come out and make commentary on the topic. And of course, Macau and Hong Kong are not immune. I think what we've experienced is pretty consistent with our peers who have comparable retail footprint. To the first question that you raised, we're not going to provide specific numbers, but we were pleased with the bounce back in July. And as you know, market share can bounce around here and there. over the course of any given year or any given quarter. And as I said in my prepared remarks, you can't take market share to the bank. So, what we don't want to do is completely blow out our reinvestment levels and pursue a market share doesn't drive meaningful flow-through. So, we are being disciplined with respect to reinvestment and being aggressive in terms of going out and getting business.

Craig Billings:

Sure. Thanks, Joe. Well, First of all, we were delighted with the public announcement of the GCGRA, the Federal regulatory body for gaming. If you -- for, I guess, you and everybody else on the call, if you haven't taking a look at their website, we encourage you to do that. The members of that body are some of the luminaries of the industry and very, very experienced regulators. The establishment of the GCGRA creates -- hopefully creates incremental clarity for investors and financing sources. It certainly has on the financing -- on the bank financing side. And then you'll also note that they recently awarded a lottery license for the UAE, and I think that, that hopefully again, gives folks comfort. I assume that they will be moving forward next -- to the next step in our licensure. I don't have a specific time line for you, but you can see all the momentum that's happening there.

Operator:

Thank you. Our next question is from Shaun Kelley with Bank of America. You may go ahead.

Craig Billings:

Thanks, Shaun. Yeah, I'm sure you saw the news flow with respect to -- it was nearly a single day, but with respect to the recent visitation record, your -- you're right, we don't really swim in that pond. It's not about the number of bodies, it's about the quality of the bodies. You're also correct that, if we had to pick up one of the two properties that was more exposed to that, it would be downtown, and I can't say that, that was a meaningful -- that had a meaningful impact rather during the second quarter, it was really about share. We have to fight for share every day. That's what we need to do. So I don't -- we don't really watch visitation numbers and think about the broader impact on our business because, again, for us, it's about who's there, not how many are there.

Craig Billings:

No. There's a lot of crosscurrents happening in the economy there. So we watch that very closely. And as we've seen in this cycle and in previous cycles, the gaming business has been pretty resilient. You'll note the comment that I made to the previous caller with respect to retail. And I think you see that in the retail revenue and the retail revenue trends, but with respect to gaming, we don't see that. What we see is a mere competitive environment for market share. And so we have to be competitive and get our fair share.

Operator:

Thank you. Our next question is from Dan Politzer with Wells Fargo. You may go ahead.

Brian Gullbrants:

Sure. Well, with the caveat that Macau has always been and always will be an extremely competitive market. I'm not going to comment on specific promotional activity by others in the market, but I can tell you that our reinvestment in any given quarter could move up or down 50 basis points, 75 basis points, something like that based on what we're trying to achieve, but the core of our competitive strength will always be product and service.

Craig Billings:

Well, I would say, anecdotally, it is impactful. I say anecdotally because we have so much going on, both in terms of internally generated events and programming that we're doing here and citywide events that are happening or events that are happening in other properties. So, I mentioned in my prepared remarks, we've done some $970 million in EBITDA out of in Las Vegas over the trailing 12 months. That's a real credit to the team here. So, every little bit counts. I can't isolate any particular event short of, of course, the major events like F1, Super Bowl, things like that. And as I said on the previous call, we're delighted to have the Sphere and their team as neighbors. We love innovators, we love people that do things at the cutting edge and drive high-quality visitation.

Craig Billings:

Sure.

Stephen Grambling:

Thank you. I guess sticking with Vegas, Craig, you've been in and around the industry for -- and seen multiple cycles. I guess with all the concerns mounting over the consumer, what are you on watch for in your business as perhaps a leading indicator? And how do you think about the operating leverage of the business now versus history in terms of being able to flex if the market changes?

Stephen Grambling:

And perhaps as an unrelated follow-up. You mentioned the progress made in the UAE. There also looks like there's been some progress in Thailand. I guess, what are your latest thoughts on that market? Would that be something that you'd pursue? Or do you more likely to be pursued out of the Hong Kong entity? Thanks.

Stephen Grambling:

Great. Thank you.

Operator:

Thank you. The next question is from David Katz with Jefferies. You may go ahead.

Craig Billings:

Sure. The second portion of your question first, we don't target, we don't have target leverage levels, because we will lever in place EBITDA to develop new projects. But we feel very good with where we are now. There's a WACC minimization question that needs to be answered, and we'll probably in that zone, at the leverage level that we're at today. With respect to buybacks, it's a little bit like capital deployment. We think about these things in five and 10-year increments, and over five or 10 years there's going to be times when the stock is expensive. There's going to be times when the stock is fairly priced and there's going to be times when the stock is cheap. And so what we need to do is continuously decapitalize in an appropriate manner, and of course, we will consider whatever the implied valuation is in the equity at any given point in time. And we will, act accordingly. But if we're growing the company by putting capital in the ground, we're returning capital to shareholders through the dividend. And we are decapitalizing the business and we're doing the right thing for those who have a long-term view on our business. And those are the people that we care about.

Craig Billings:

Sure.

Robin Farley:

Great. Thanks. Macao question and a Vegas question. For Macau, it seems like the use of smart tables has impacted market share in Macau pretty meaningfully. If you could kind of remind us where you are with implementing those and maybe a time frame for if there's kind of a learning curve for a several quarters or something, and kind of where you are with that, and then I have a Vegas question. Thanks.

Robin Farley:

Okay. Great. Thank you. And then just on Vegas. You talked about some of the expenses of wage hikes have kind of hurt some of the EBITDAR flow through. If you could just remind us when that will sort of be fully anniversaried. And then I don't know if there's anything you'd call out about comping the Super Bowl in Q1. Anything you'd call out there? Thanks.

Robin Farley:

Okay. Thank you very much. Thanks.

Operator:

Thank you. Our next question is from Brandt Montour with Barclays. You may go ahead.

A – Craig Billings:

Sure. Trying to figure out how to condense and hours or the content into a response. But so the way I think about it is like this. There is not a proper integrated resort on really that half of the planet, okay? So the closest is going to be in Asia, right, Singapore or Macau. So we have this unique asset. We have a very, very robust population that is within a eight-hour flight of that asset. This is a part of the world where people are accustomed to flying longer distances in order to holiday and to visit. You have 86 million airlifts coming into the Dubai Airport, we're about 55 minutes via one of three six-lane highways from the Dubai airport. In fact, because of traffic, it's shorter to get to us than it is to get to the major areas within Dubai. And then you have 10 million people locally, 9 million of whom are not Emirati and therefore, are able to play. So -- and if you compare that to Boston, if you compare that to New York City, you can see that, that's a pretty favorable number. So we have a very robust go-to-market plan. We're not going to talk about it publicly, but we will be ready when the door is open. And I would say to your comment on Europe, yes, Europe is an important market for the UAE in general. But don't forget India. India is a huge market for this part of the world. There's a lot of folks there. There's a lot of wealth in India, and that's going to be an important market. There are other parts of Asia that are big markets for the UAE as well. So it's an exciting project. I think the catchment area is probably larger than any other project that we have done, maybe akin to Vegas if you take into account the fact that Europe's population is pretty substantial and the international airlift is incredibly strong.

Craig Billings:

No. Well, first of all, a market share can bounce in, three people can come in and change your market share on any given day. That's the nature of the business, right, particularly when you're operating at the high end. So market share can bounce around. I think we are in a constant process of evaluating and re-evaluating not just the quantum of reinvestment that we will provide, but the form of that reinvestment, and we are targeting that reinvestment at very specific segments and sub-segments of the market. And so we recognized what we needed to tweak from Q2 and from June in particular, and we corrected it, and we went to market with it, and we, like I said, we bounced back in July, which was good to see.

Julie Cameron-Doe:

Thank you, Brent. And operator, the next question will be our last. Thank you.

Chad Beynon:

Afternoon. Thanks for taking my question. Craig, you highlighted just kind of the overall strength in Vegas, the $970 million. You guys are always out punching your weight in that market, and you still have additional space to expand the property or build something differently. So, kind of going back to the capital allocation question, how are you thinking about Vegas long-term as a market to grow your footprint and the returns in that market versus some of the other things that you've talked about on this call. Thanks.

Chad Beynon:

Thanks. And then secondly, just in terms in terms of the different customers in your database, focusing on the US, I guess, mainly still in Vegas. Are you seeing any change in trends with your, I guess, your high end versus your ultra high end anything you're able to talk about? I know retail, you talked about in Macau is kind of moving with the market, but anything that you're seeing differently in the US with the different levels of upper end customers in your database?

Brian Gullbrants:

Yes. I would say at the highest end of the market continues to grow for us on the non-gaming side, and the team has done a phenomenal job in capturing that business and it's perfect for our brand, and that's where we sit and operate and do a great job. So it continues to grow.

Craig Billings:

Sure.

Craig Billings:

Thanks, everybody.

Craig Billings:

Thanks, Julie. Good afternoon, everyone, as always. Thanks for joining us today.

Operator:

[Operator Instructions] Carlo Santarelli from Deutsche Bank.

Craig Billings:

Yes. Sure, Carlo. You cut out a little bit there at the end, but I got the gist of your question. Macau has always been and is currently a competitive market. And as you know, we focus on product and service, and we focus on attracting the best guests in the market. So I've seen a lot of the questions and the commentary around promotional activity.

Carlo Santarelli:

Helpful. And then, Craig, just going back to your remarks on Las Vegas. You made a point of kind of calling out February being the primary driver of the quarter. You then follow that up with drop, handle, RevPAR kind of all up in April and mentioned kind of tougher comparisons along the way.

Craig Billings:

Sure. Well, first, as it specifically relates to drop and handle, we've almost doubled handle from 2019 to 2023, and a lot of that was share taking. We have table drop that's up almost 50% in the same period so not too shabby. And as you know, I've said on several calls, trees don't grow to the sky.

Operator:

Our next caller is Joe Greff with JPMorgan.

Craig Billings:

Yes. Thanks, Joe. It has a lot to do with the revamp of our loyalty program and the fact that we have given our customers choice in terms of how they want their reinvestment. And so in any given quarter, those choices change. And some of those choices flow to contra revenue and some of those choices flow to OpEx. So that's really the primary driver. It's not indicative of a systemic change in the aggregate reinvestment.

Shaun Kelley:

Craig or Julie, I just wanted to ask about maybe the Macau OpEx trajectory. Obviously, you've driven and sounds like you expect to continue to see some pretty great operating leverage there. But it is -- as we're still normalizing in that market, it's probably a little bit tougher for us to get a sense of just sort of underlying core expense growth or inflation. So any comments as things start to annualize and normalize a little bit? How much kind of on a year-on-year basis you'd expect that to level off to maybe in the back half of the year?

Shaun Kelley:

Super. And just as my follow-up, Craig, to go back to sort of the Las Vegas macro commentary, I mean, I think what many of us struggling with, and I'm sure you're familiar with this in conversations with industry executives, is just -- there have been some comments out there about some leisure -- even at the high end, some leisure pushback when maybe the product mix isn't perfect. And I think -- in some cases, it looks like Wynn is kind of perfect on many of these metrics.

Craig Billings:

Yes. Sure, Sean. Not really. So if you think about what's happening in Vegas, those who have deployed capital in Vegas over the course of the past 5 years, it actually hasn't been so much -- at least innovative capital. It actually hasn't been so much the industry.

Brian Gullbrants:

Yes. I mean, everything is pretty much a result of retreated back to what it was in 2019 with respect to bookings. And when you look at the pace of group, we continue to pace to have our best year ever over '23, which was our best year ever, and '25 and '26 are pacing nicely, not just in group, but we're seeing that across the board.

Craig Billings:

And what it means by 2019 is that it's reverted to a normal -- a very normal booking process.

Operator:

Our next caller is Dan Politzer with Wells Fargo.

Craig Billings:

Sure. So first and foremost, and this is true company-wide, we never want to be in a position where we have to walk someone because we don't have their room type or we don't have their room available for them. Second, at some point, the experience on the property actually degrades if you get to use an extreme 99% occupancy. So we're always balancing occupancy and rate in order to drive strong revenue results but also maintain a great experience on the property.

Craig Billings:

Sure. Yes, it's very, very early. I mean, we -- first things first, we need to understand that the regulatory structure, the licensing structure, the bidding structure, et cetera, are all going to be consistent with other jurisdictions that are considered best-in-class. I personally think they will be based on the information that we have to date. But that's really a condition precedent to our further involvement.

Operator:

Our next caller is John DeCree with CBRE.

Craig Billings:

Sure. The total budget is around $4 billion. If budgets move here and there but no substantial movement, our capital contribution will be, round numbers, call it, $900 million. That heavily depends on the construction leverage. So we're in the midst of figuring that out now. But you can figure something like 50-50 debt to equity and then we would be 40% of the equity.

Craig Billings:

Sure. What I would say is this. February, as we called out, it would be -- was, of course, the strongest month of the quarter. And then in rank order, it would be March and January.

Robin Farley:

I wonder if you could just touch on anything for Al Marjan that has to happen from a regulatory perspective approval at any level. If the construction were done tomorrow before it can actually start operating the casino, just to clarify that.

Robin Farley:

But is there anything from a perspective in terms of anything that has to be legalized at any level or separate from just what we have to do to meet licensing?

Operator:

Our next caller is Ben Chaiken with Mizuho.

Craig Billings:

Sure. And then we held high subsequent to the end of the quarter. It really is just a function of the normal ebb and flow of the game. A lot of that has to do with the volume of high-end play. And so there's really nothing -- there's really not a lot to see there and, over time, hold will normalize.

Operator:

And that last caller comes from David Katz with Jefferies.

Craig Billings:

Thanks, David. You were chopping up there a bit, but I think I got the gist of your question. I think you were addressing the development opportunities in the land that we have here. But we do -- we have a very substantial land bank in Las Vegas, as you know. And the reality is that we are replacing choices now from a development perspective.

Craig Billings:

Sure. Yes. So -- the reality is it's many things. So what happens in the macro economy, what happens to borrowing cost, what happens to the cost to build and then what are our other opportunities, how many of those opportunities can be pushed through our design and development team at any given point in time.

Julie Cameron-Doe:

Thank you. And thank you, operator. With that, we'll bring this call to a close. We thank you for your interest in the company and look forward to talking to you again next quarter.

Operator:

And thank you for participating on today's conference call. You may now disconnect.

Julie Cameron-Doe:

Thank you, operator, and good afternoon, everyone. On the call with me today are Craig Billings, Brian Gullbrants and Steve Weitman in Las Vegas. Also on the line are Linda Chen, Frederic Luvisutto and Jenny Holaday. I want to remind you that we may make forward-looking statements under safe harbor federal securities laws, and those statements may or may not come true. I will now turn the call over to Craig Billings.

Julie Cameron-Doe:

Thank you, Craig. At Wynn Las Vegas, we generated $270.8 million in adjusted property EBITDA on $696.8 million of operating revenue during the quarter, delivering an EBITDA margin of 38.9%, up 140 basis points year-on-year. Higher than novel table games hold benefited EBITDA by around $10 million in Q4. OpEx, excluding gaming tax per day was $4.4 million in Q4'23, up 16% year-over-year, well below the 19% increase in revenue. The sequential increase in OpEx was primarily driven by higher programming and staffing costs related to F1. Turning to Boston. We generated adjusted property EBITDA of $64.4 million on revenue of $217.1 million with an EBITDA margin of 29.7%. We've stayed very disciplined on the cost side with OpEx, excluding gaming tax of $1.14 million per day in Q4'23, down 2% year-over-year, driving a 70 basis point increase in EBITDA margin. The team has done a great job mitigating union-related payroll increases with cost efficiencies in areas of the business that do not impact the guest experience. Our Macau operations delivered adjusted property EBITDA of $297 million in the quarter on $910.6 million of operating revenues. As Craig alluded to, we estimate higher-than-expected hold positively impacted EBITDA by around $7 million during the quarter. Importantly, mass hold at both properties within the expected range during the quarter with the hold impact primarily related to the VIP side of the business. EBITDA margin was 32.6% in the quarter, an increase of 140 basis points relative to Q4 2019, driven by a combination of the favorable mix shift to higher-margin mass gaming and operating leverage on cost efficiencies. Our OpEx, excluding gaming tax was approximately $2.56 million per day in Q4, a decrease of 14% compared to $3 million in Q4 2019. The team has done a great job remaining disciplined on costs and we're well positioned to continue to drive strong operating leverage as the market continues to recover. In terms of CapEx in Macau, we're currently advancing through the design and planning stages on our concession commitments. And as we noted in the past few quarters, these projects require a number of government approvals, creating a wide range of potential CapEx outcomes in the near term. As such, we expect CapEx related to our concession commitments to range between $350 million and $500 million in total between 2024 and the end of 2025. Moving on to the balance sheet. Our liquidity position remains very strong with global cash and revolver availability of nearly $4.5 billion as of December 31. This was comprised of $2 billion of total cash and available liquidity in Macau and approximately $2.45 billion in the US. Bringing it all together, the combination of strong performance in each of our markets globally with our properties generating nearly $2.2 billion of property EBITDA in 2023. Together with our robust cash and liquidity position, creates a very healthy leverage and free cash flow profile for the company globally. Further, the Board approved a cash dividend of $0.25 per share payable on February 29, 2024, to stockholders of record as of February 20, 2024. We also repurchased approximately 1.6 million shares, $139 million during the quarter, highlighting our commitment to prudently returning capital to shareholders. We will consider additional dividend increases at Wynn Resorts and the initiation of the dividend from Wynn Macau as the recovery progresses and the exact timing of our global capital deployment plans become more clear. Finally, our CapEx in the quarter was $113 million, primarily related to the spa villa renovations and food and beverage enhancements at Wynn Las Vegas concession-related CapEx in Macau and normal course maintenance across the business. With that, we will now open up the call to Q&A.

Carlo Santarelli:

Hey, Craig. Hey, Julie, everyone. Guys, as you think about kind of Macau and obviously, with the amenities that come on, whether it's concession-related or other. Does this kind of 2.5 to 2.6 daily OpEx rate feel like you're in the right place going forward as we think about 2024, at least?

Julie Cameron-Doe:

Yeah, there were some specifics, Carlo, sequentially. So if you think about it, it increased 160,000 per day or $15 million sequentially and that was split across three different buckets. The first one was higher variable costs on the extremely robust business volumes with hotel occupancy up 100 basis points, GGR up 12%, F&B up 13%. The second bucket really is payroll. We had more overtime pay related to holidays because there were nine public holidays in the quarter versus just two in the previous quarter. And then the third bucket was really the highest spending on concession-related non-gaming events, because this was a particularly heavy event quarter. And you remember, we kind of foreshadowed that in the previous call when we talked about all the different programming we had going on. And that really kicked off with the hypercar exhibition that we had. And then we had several well-received art, sports and culinary events. So that's really what was driving it, the sequential pop. Going forward, we feel, you know we've got -- as Craig said, with EBITDA margin at both properties above Q4'19 levels and with the OpEx well controlled. We do expect the pace of growth in market-wide GGR along with our revenue mix to be a key driver of margins. So there's going to be some quarter-to-quarter variation as we see different programming coming through and we continue to roll out the programming associated with concession commitments.

Carlo Santarelli:

Very helpful. Thank you for the detail as well. Then just as a follow-up. Obviously, the Las Vegas results kind of speak for themselves, and it would be hard to notice anything changed in Las Vegas in the fourth quarter. But obviously, you guys do have a new competitor there to the north. And I was just wondering now with at least a couple of months of kind of experience with that. Could you talk a little bit perhaps about how Fontainebleau has kind of impacted positively or negatively the asset and kind of daily traffic.

Carlo Santarelli:

Great. Thank you, both.

Joseph Greff:

Hi, everyone. Thanks. Craig, in the fourth quarter, mass table GGR was 117% of fourth quarter levels, up from 106% in the 3Q relative to '19 or 3Q of '19. I know you don't sort of think about it maybe or present it at least externally to the same degree that Las Vegas Sands does between how we define this premium mass and its base mass business. But when you think about within the different tiering that you guys have? Would you say all of your mass table tiers are fully recovered plus relative to '19? Or are there some tiers that still have relative recovery to get to and exceed '19 levels?

Joseph Greff:

Great. That's helpful. And Craig, we heard your positive commentary about February and the 1Q in Las Vegas and in addition to the Super Bowl, the group traction. Would you expect 2Q '24 through 4Q'24 group room nights to be up year-over-year?

Brian Gullbrants:

Sure. Joe, as we're seeing this year play out, we're really encouraged by the forward group booking trends that we're seeing. The outlook for group business is super strong. '24 is pacing towards a record room night. So that base is there for us to yield from. And the sales and revenue teams continue to just do a great job in yield managing our properties.

Craig Billings:

We don't disclose that, but you can assume that rates are contracted on a multiyear basis and bear some relationship to CPI.

Operator:

Thank you. Our next caller is Shaun Kelley with Bank of America. You may go ahead.

Craig Billings:

Well, I think you're going to see it across the portfolio, but you're going to see it disproportionately at Wynn Macau just based on the geographic location of the property. You tend to have that more transient customer in downtown and we're going to be a beneficiary of that there. But it affects Palace as well. I mean there's a lot of reasons to visit Palace and to make Palace a destination for a base mass customer. You should see the queue just to get on the gondola out in front of the lake every day. And now as we add incremental amenities like we did with Illuminarium, there's a lot of reasons to visit our property more so than they probably ever have been. So I would say it affects both properties to some extent, but I would expect it to disproportionately affect the property downtown.

Craig Billings:

Sure. On the first portion of your question, the event calendar looks pretty good because we spend a whole bunch of time creating our own events. So it's not just the city wides. We've been programming the heck out of this joint for several years now, and we've built a lot of momentum on doing that. And that not only helps us from a brand and marketing perspective, but clearly from a room night and a pricing on rooms perspective. So I feel great about the remainder of 2024 from an events perspective. With respect to the sphere, it's been, I'd tell you, it's been pretty amazing. I mean it probably doesn't affect our rate, but we sure do get a whole bunch of requests to reside on that side of the building in order to see the sphere itself. And certainly, on the U2 weekends, we see an uptick in terms of very high-quality occupancy. So you're talking about kind of the best of the best customers that want to stay with us because we're actually the closest property to the sphere as the crow flies. So it's definitely been additive to us on the margin. And I got to tell you, I admire and respect what they've done by doing that. I think it's incredibly novel. It's incredibly unique, and it's yet another kind of only in Vegas experience that you can have and we're delighted that they're next door.

Operator:

Thank you. [Operator Instructions] Our next caller is Dan Politzer with Wells Fargo. You may go ahead, sir.

Craig Billings:

Sure. I mean, look, there's a lot -- we have a lot of different avenues for growth. We've got a huge land bank here in Vegas, right? We've got the land across the street. We've got the golf course. There's a lot that we can do here. We're in pursuit as I think everyone knows, in New York, we have a project that's actually coming out of the ground in the UAE, and that's going to be a very substantial opportunity for us. There's some additional states that are moving, albeit at a relatively slow pace that might prove to be opportunities for us. We obviously don't do every possible -- every potential jurisdiction. We're very selective. And then there are certain international jurisdictions like Thailand, for example, that are also in the process of considering gaming. So we're always balancing really two things. Our ability to do what we do so well, remember, we're one of the last in the industry that maintains its own design and development group. And so it's not as though you can bang for these out in any particular year. So that's always a consideration. And then the other is capital, as you rightly pointed out. So we're always looking at what is the highest and best use of capital that we can deploy, and then we're making decisions accordingly. We will certainly make use of that land across the street in Las Vegas. It's not a question of if, it's a question of when, and we'll see how things play out in New York and things play out in a couple of other jurisdictions in determining the timing of the use of that land.

Craig Billings:

Yes. It really depends, you're right. There's a lot of moving parts there, right? We have a debt maturity later this year there. We need to think about our leverage profile in Macau. And what that longer-term leverage profile should be. We have some capital that we need to put in the ground there. We had nearly three years of closure and cash burn. So the question is, what do we want the balance sheet to be? How will the CapEx plans come together in terms of the timing of capital deployment, which we're studying and learning more about as we go through the design and development process every day. And then, of course, the dividend. And as you know, the dividend just as a global statement, dividends are the cornerstone of our capital return strategy. So stay tuned. We are looking very closely at it, and we'll figure it out in due course.

Julie Cameron-Doe:

Thank you.

Operator:

Our next caller is Robin Farley with UBS.

Craig Billings:

Sure, Robin. Yes, January, well, keep in mind, last year, Chinese New Year started in January. And so this year, it starts in February. So as I mentioned in my prepared remarks, February really sets the tone for the quarter, and it's where all the action is this year in Q1. March has a couple of headwinds. Easter timing is one of them and then the absence of CON/AGG is another. But our forward booking indicators continue to look strong, and we feel good about it. I've said probably five times on the last three or four calls that trees don't grow to the sky, and I would continue to tell you how things are looking in Vegas, and they continue to look good. They continue to look good for us. So how the quarter plays out will be very dependent on February. And again all forward indicators look strong for February. But subsequent to that, we'll take it from there.

Craig Billings:

Sure.

Brandt Montour:

Thanks. Good evening, everybody, and congrats on the results. In Macau and Palace, I guess, specifically, but these are -- it's a broader question. Can you comment on just the broader competitive environment for premium mass players, how it's evolved sort of into the early part of this year, which with volumes being strong, infrastructure, travel infrastructure going back, how has that changed? And is that a tailwind for you as we go forward here and as volumes continue to grow?

Brandt Montour:

Great. Thank you.

Stephen Grambling:

Hey, thank you. I may have missed this, but I guess how are you thinking about looking currently at the Super Bowl, how that might compare to Formula 1? Is there any way to kind of back out how you think about the contribution from Formula 1 in the quarter and how that might grow next year?

Brian Gullbrants:

Yeah, both hotel revenues and rates are very similar to Formula 1. The weekend Super Bowl event is another great match, I think, for our brand. And as you said, we're going to have double the credit and track money we had previously. So I think we're in for a great weekend here.

Operator:

Thank you. Our next caller is John DeCree with CBRE.

Craig Billings:

Yeah. Great question. I guess I'll answer that as a Las Vegan and someone who cares about the broader market and wanting to see everybody in the market participate and do really well. There's clearly, I mean, look, the first time you do anything of this scale, you're going to have learnings. And it's just natural. And so I do think that there's a lot that can be done to make the event more relevant for the town more broadly. And I think that F1 understands that. And I think, frankly, the operators in town understand that. Even those like us who disproportionately benefited. So I think the event is only going to get better and better. I think what this year approved is that the core contingent of people that travel to go to an F1 race is our customer. And so you better believe that we will program the heck out of this place yet again, just like we did this F1, this last F1 this coming year, and we will do our best to attract the best customers in the market. And hopefully, again, there will be more opportunities for some of the other tiers of properties in the market to participate in the event this year as they continue to evolve and change the event.

Craig Billings:

Yes, I'll leave the detailed China macro analysis to people who do that for a living. But there's certainly a lot of crosscurrents to consider. You have tremendous pent-up demand still from several years of mirror closure. You have the ease of proximity to Macau, which actually benefits Macau when the economic situation perhaps isn't as robust as it could be. And you have some modest stimulus efforts that we've seen. But you also, as you rightly pointed out, clearly, have a litany of difficult economic indicators. Yet Macau continues to tread along. So to us, it's really the long-term viability of Macau. We're thinking in kind of 5, 10-year increments. So it's really the long-term viability of Macau that's most relevant. And we're clearly already at levels that allow us the financial and operating flexibility to plan for that longer-term time horizon. So I think it's well observed, maybe not well understood, but well observed that Macau's trajectory does seem to be decoupled from the broader China macro. I think you saw that in 2009 as well. And I think that bodes well for the future. Does it bode well for next quarter? I don't know. Does it bode well for the quarter after that? I don't know. But it certainly bodes well for the future, and that's what we're thinking about.

Craig Billings:

Thank you.

Operator:

Thank you. And our final question comes from Chad Beynon with Macquarie. You may go ahead, sir.

Craig Billings:

Sure. I guess what I would say is if you look at the trajectory over the course of 2023, retail sales have been and were incredibly strong in Macau up over 2019. You saw -- you can see -- you can look at our numbers, Q3 to Q4, you can see that they were up very, very modestly, I think, about 10 basis points. And so certainly, if anything from China macro is affecting Macau is probably there. But again, given the relative strength compared to pre-COVID, I think it's difficult for us to complain. I think what appears to us to be occurring is, to a certain extent, Macau has become a substitute for Hong Kong from a retail sales perspective. And certainly, based on the changing type of visitation that you see, particularly on Cotai, I think you can support that premise. And so I think it's -- again, if you look at the long term, I think it's very bright for Macau from that perspective. And I think to the extent that someone goes to Macau with a retail-based motivation and the gaming-based motivation or eventually a retail-based motivation and entertainment-based motivation. That's fine. That's great. I mean that's a natural evolution of Macau. But you can see the quarter-over-quarter changes in our numbers.

Julie Cameron-Doe:

I'll take that one. Thanks, Chad. Yes, so we announced in August that we were exiting the jurisdictions we operate in, and we were leaving New York and Michigan under review. So we're continuing to -- that strategic review of those two states, and we'll stay tuned. We'll have more information on that in the near future. Everywhere else is pretty much wrapped up now. We've just -- we're working on closing down Massachusetts online as well. And wherever we're able to and where we can interact with anybody else, obviously, with player databases and so on, we'll make sure that we do the best for our shareholders and monetize the assets that we have in a way that works well with what's allowed and what's available out there in the market.

Craig Billings:

Thank you.

Operator:

Thank you for participating on today's conference call. You may now go ahead and disconnect.

Julie Cameron-Doe:

Thank you, operator, and good afternoon, everyone. On the call with me today are Craig Billings, Brian Gullbrants and Steve Weitman in Las Vegas. Also on the line are Linda Chen, Frederic Luvisutto and Jenny Holaday. I want to remind you that we may make forward-looking statements under safe harbor federal securities laws, and those segments may or may not come true. I will now turn the call over to Craig Billings.

Julie Cameron-Doe:

Thank you, Craig. At Wynn Las Vegas, we generated $219.7 million in adjusted property EBITDA and $619 million of operating revenue during the quarter, delivering an EBITDA margin of 35.5%. Higher than normal hold benefited EBITDA by around $12 million in Q3 and hold normalized adjusted property EBITDA was up slightly year-over-year. The strength in the quarter was broad-based across the business. Hotel revenue increased 10% year-over-year, to $178.5 million, a new third quarter record on the back of a 9% increase in ADR and 120 basis point increase in occupancy. Our other non-gaming businesses was strong across food and beverage, entertainment, and retail all-up nicely year-on year. In the casino, GGR increased around 22% year-over-year, driven by a 7.6% year-over-year increase, in slot handle a 6.5% increase in table drop, along with higher table games hold. OpEx excluding gaming tax per day was $4.1 million in Q3 2023, up 14% year-over-year due to variable costs associated with revenue increases, roughly $10 million of non-recurring items and certain structural changes, including an accrual for the anticipated increases associated with the new union contract, our annual cost of living adjustments for non-Union employees and the launch of our production show. Turning to Boston. We generated adjusted property EBITDA of $60.5 million on revenue of $210.4 million both down around 1% year-on year. EBITDA margin was 28.8%, broadly in line with Q3 2022. As Craig noted business was largely stable year-on year. In the casino, we generated $182.6 million of GGR down 1% year-on year as record slot handle was offset by lower table games volume. Our non-gaming revenue was flat year-over-year at $54.4 million with record hotel revenue offset by lower food and beverage revenues. As noted on our prior call, and as Craig mentioned earlier, business volumes at the property were impacted by the Sumner Tunnel Restoration Project, which is expected to continue intermittently over the next 12 months or so. While the tunnel construction is out of our control, we have stayed very disciplined on the cost side with OpEx excluding gaming tax of approximately $1.13 million per day in Q3 2023, down 0.5% year-over-year and down around 2% sequentially. The team has done a great job mitigating union related payroll increases with cost efficiencies in areas of the business that do not impact the guest experience. Our Macau operations delivered adjusted property EBITDA of $255 million in the quarter on $819.8 million of operating revenue. We estimate lower-than-normal hold negatively impacted EBITDA by around $11 million during the quarter with higher-than-normal hold at Wynn Palace, more than offset by lower-than-normal hold at Wynn Macau. We felt particular strength in mass casino drop, direct VIP turnover luxury retail sales and hotel revenue all above Q3 2019 levels. EBITDAR margin was 31.1% in the quarter, an increase of 300 basis points relative to Q3 2019 with Wynn Palace margin reaching 33.7%, while 660 basis points above Q3 2019 levels. Our concession-related non-gaming programing have accelerated over the past few months with the FIBA 3x3 basketball tournament, the Da Vinci Immersive art exhibition, the Hypercar exhibition, some DJ events, and several other well-received concerts and culinary events. EBITDA margin strength was driven by a combination of the favorable -- with favorable mix-shift to higher-margin mass gaming and operating leverage on cost efficiencies. Our OpEx excluding gaming tax was approximately $2.4 million per day in Q3, a decrease of 20% compared to $3 million in Q3 2019. The team has done a great job remaining disciplined on costs and we are well positioned to continue to drive strong operating leverage as the business recovers over-time. In terms of CapEx, we're currently advancing through the design and planning stages on our concession commitments. And as we noted the past few quarters, these projects require a number of government approvals, creating a wide range of potential CapEx in the very near term. As such, we expect CapEx-related to our concession commitments to range between $300 million and $400 million in total between Q4 2023 and the end of 2024. Turning to Wynn Interactive, you will recall we announced in August that we decided to rationalize the business to primarily focus on Massachusetts and Nevada, where we have a physical presence. As a result, our EBITDA burn rate decreased substantially, both sequentially and year-over-year to $4.9 million in Q3 2023. Moving on to the balance sheet, our liquidity position remains very strong with global cash and revolver availability of approximately $4.3 billion as of September 30th. This was comprised of $1.8 billion of total cash and available liquidity in Macau and $2.5 billion in the U.S. Importantly, the combination of strong performance in each of our markets globally with our properties run rating over $2.1 billion of annualized property EBITDA together with our robust cash and liquidity, creates a very healthy leverage and free cash flow profile for the company globally. To that end, we repurchased $400 million of our 2025 Wynn Las Vegas senior notes at a discount to par during the quarter. Further, the board approved a cash dividend of $0.25 per share payable on November 30 to stockholders of record as of November 20, 2023. We also repurchased approximately 597,000 shares for $56.2 million during the quarter, highlighting our commitment to prudently returning capital to shareholders. Finally, our CapEx in the quarter with $114 million, primarily related to the spa villa renovations and food and beverage enhancements at Wynn Las Vegas, concession related CapEx in Macau, and normal-course maintenance across the business. With that we will now open up the call to Q&A.

Carlo Santarelli:

Hi, Craig. Julie, everyone. Thank you for taking my question. Craig, the market in the 3Q. Was that about annualized about $24.5 billion, which is about 8% kind of below the midpoint of that range you spoke to earlier in the year, I believe what was on the first quarter call. It looks like just annualizing 3Q results and not adjusting for hold you're about halfway there at the Macau property and basically there at 2019 levels give or take a couple of million bucks at the at the Cotai property. Based on what you've seen over the last kind of six months since that call, the way the markets evolve from several perspectives. Does that kind of benchmark for market GGR still hold true with kind of how you're thinking about getting back to those 2019 levels in totality.

Carlo Santarelli:

Great, that's helpful. And then if I could, just one follow-up. Obviously, a lot has been made in recent earnings around reinvestment within the Macau gaming arena. It's always hard to tell when looking at kind of the public filings and releases and whatnot, it doesn't look like there was anything sizable in this quarter in terms of reinvestment, the direction of reinvestment one-way or another. Could you comment a little bit about kind of how you guys see that data relative to 2019, maybe how you see it now and how you see a trending.

Carlo Santarelli:

Great, thank you very much.

Joe Greff:

Good afternoon, guys. Just going back to your earlier comments. Craig, on October in Macau, the two properties in the aggregate. How close are they at October 2019 EBITDA levels in the aggregate. Obviously, Wynn Palace ahead Wynn Macau as you mentioned it.

Joe Greff:

Great. And then my follow-up question relates to Wynn Al Marjan, Craig what are the next steps and the timing for the next steps there, including the issuance of a license.

Joe Greff:

Thank you.

Operator:

Thank you. And our next caller is Shaun Kelley with Bank of America.

Craig Billings:

Sure, I'll start and then I'll see if Brian has anything to add. I mean, that's really kind of our business. So I can't say that that we've seen anything materially different this quarter than we've seen in the past few quarters. The numbers, I mean you can look at the revenue numbers, the revenue numbers are incredibly strong. And so. we're pretty proud of what we've been able to deliver over the course of the past year. High-end international play remains a little bit of a mixed bag as it has over the course of really since the reopening from COVID. But I feel great about where our database is. We always skew towards the high-end. Brian, would you add anything to that.

Shaun Kelley:

Just as a quick follow-up. Any OpEx still and I think this was maybe in Julie's remarks. I heard something about maybe a $10 million impact in Las Vegas. I was wondering if I caught that correctly, if you could elaborate a little bit on what they may have been.

Craig Billings:

And it was a mixed bag of stuff, Shaun.

Craig Billings:

You got it.

Dan Politzer:

Hi, good afternoon, everyone. Thanks for taking my questions. First one, just wanted to touch on the promotional environment in Macau, some of your competitors have made comment that they are being more aggressive. So I just wanted to check, check with you there, and I know, you know, the contra-revenue has picked-up a little bit in the quarter. I think that's mostly in Wynn Macau, but just anything to kind of call-out there in terms of the environment at your properties.

Dan Politzer:

Okay, so just some accounting nuance, okay. And then just moving to Las Vegas, you know, obviously, F1 is right around the corner. It seems like this is an event that skews more to the high-end. And that's right in your wheelhouse. Is there any way to think about, you know, the EBITDA uplift given some of your competitors have thrown out this kind of mid-single-digit type EBITDA lift.

Brian Gullbrants:

Sure, I'd say F1 is really come in nicely right now for all areas of our business. We should exceed actually our all-time hotel revenue as well. Our hotel revenue record by about 50% for the three day period. And as Craig mentioned, the gaming revenue and credits, looking quite promising. Some of the best we've ever seen. So I think, we're looking-forward to an exciting and exceptional race week here at Wynn.

Dan Politzer:

Understood. Thanks so much.

Operator:

Thank you. And our next caller is Brandt Montour with Barclays. You may go ahead sir.

Craig Billings:

Yes, sure, you're right. Disruption did tail-off at the in the early portion of this quarter. There were some trailing works, including some work that was done in some of the high-end salon areas that took a little bit longer, but in the main, your statement is correct. And now, it's really the hand-to-hand combat of gaining market-share. I mean, we've done this -- we've done this before, you know, Wynn Palace opened, we were not nearly as experienced to some of our competitors in mass marketing. We got experienced very fast. And you can see obviously the results of that at Palace. And so it's really kind of every lever that you have to pull. Right. It comes down to the hosting team, it comes down to food and beverage, it comes down to some entities that you're offering. It's everything. And so, I can't tell you that there is one silver bullet. It really doing at 1 basis point at a time and that's where we're focused now.

Julie Cameron-Doe:

Sure maybe I'll start with maybe Craig can add if I miss anything. I'll just talk sort of more broadly for our whole Macau business. Sequentially, you’ll have seen that the OIBDA margin decreased around 90 basis points. About half of that was due to lower hold. But there was an additional $6 million of OpEx sequentially due to bad debt swing, because we could have a credit in Q2. You know, and then as I mentioned in my prepared remarks, I think I gave you a pretty detailed list of all the non-gaming programing that we've really accelerated and started doing in the last few months with the FIBA tournament, that Davinci exhibition, the Hypercar exhibition, some DJ events and concerts and culinary events. So when you adjust for that noise, the margin improvement thing is clearly operating leverage because we held share and we were prudent with OpEx. So you know, if we think about going-forward, we're expecting margin at Palace to generally stay-in the current range, and margin at Wynn Macau to improve as business volumes come back. So there will be quarter-to-quarter variations in our events calendar as we continue to rollout programming associated with our concession commitments.

Brandt Montour:

Helpful comments. Thanks all.

Julie Cameron-Doe:

Thanks all.

Operator:

Thank you. And our next caller is Robin Farley with UBS.

Craig Billings:

Sure, Robin. I think it's a little bit all-of-the-above. You're correct in that downtown is much more skewed towards transient customers. Towards a more base mass to use the term customer. And we benefit when visitation -- we benefit there disproportionately visitation to Macau is high. And so as visitation to the market returns, which inevitably, I believe it will, we will benefit from that. Of course, we don't want to -- and that's due to any number of factors, many of which you've described. Of course, we don't want to wait for that. Right. So in the meantime, we need to be very-very focused on market share and driving operating leverage by gaining market share. But no doubt as that transient customer comes back, downtown We'll benefit disproportionately to Palace, which is already doing extremely well.

Craig Billings:

Sure, others not doing it has never been a reason for us to consider. We have no problem being the first ore being a little bit of an outlier. It's really because of the mix of our business now. I mean, we are disproportionately mass now. So what we're trying to do is give a clearer view of how the assets are performing by providing a normalized number. Frankly, the same way we do in Vegas.

Craig Billings:

Sure.

Stephen Grambling:

Thanks. So you referenced accruing for the union contract in Vegas in the quarter. And I'm sure, you still have an impact in the fourth-quarter. But as we look-forward to 2024, how are you thinking about the major puts and takes to margins and whether you can hold margins and data similar to what you were just kind of outlining in Macau. Obviously, different considerations here.

Stephen Grambling:

Fair enough. And then one follow-up on the top line. How should we think about Super Bowl versus Formula 1 for you, do you generally think that this will be a different customer base. The same customer base. I guess what are you seeing as you get closer to Formula 1 and start to see bookings, I imagine for capable at least interest.

Brian Gullbrants:

No, I agree with you, Craig. I think on the casino side, we're going to see a very similar overlap. But on the transient side, we're going to see heavy domestic. We're really looking-forward to it. And already getting quite a bit of interest with one heck of a waiting list on the corporate side. I think we'll even do stronger. There's a tremendous amount of demand on the corporate group side for hospitality entertaining at the highest-level and our specialty here at Wynn, so I think, it'll pair very well for Super Bowl. So we're looking-forward to two successful weekends.

Craig Billings:

Sure.

David Katz:

Afternoon. Thanks for taking my question. I'd love just a little more color on how we think about margins going-forward. I admit, it's one of the, you know, aspects of the model where we've spent more time and thought and trying to get those particularly in Macau. What a normalized margin could be and what the puts and takes are around that. Obviously, not asking for specific guidance number. Just some qualitative commentary. Thanks.

Julie Cameron-Doe:

Yes. I think, David I think I run through it. And clearly, you heard the point about sequentially, we had to move-in margin was really, you know, a bunch of timing with the credit from OpEx, you know, we hold in the credit from OpEx in versus Q2. There, If you think about the way we look at it, we manage our OpEx really tightly and we, you know, we're thinking really carefully about our concession commitments and how we can program really effectively to use them, really as a marketing effort to drive that kind of brand recognition and attract customers in. You know, we've done a lot of that and that has impacted building OpEx per day-in the quarter. In the early days, I think some of those will work and some of them won't, and we're going to get a better sense of that and we'll be, you know, it's not sure about the kinds of things that we'll do. But, you know, coming back to what I said, we're expecting, you know, the margin for Wynn Palace to generally stay where it's at. And for Wynn Macau to improve with operating leverage, you know, as business volumes return. We -- the coast of coast there'll be some small movement, but we wouldn't expect it to be significant from the events calendar in Macau.

David Katz:

Right. And so, if I may just following that up, as you continue to add in, you know, more non-gaming elements. Should we think about that as somewhat of a headwind to sort of finding that comfortable margin. Or, you know, are those just really vehicles for maintaining where you're going to wind-up, you know, from gaming anyway.

David Katz:

Okay. Thank you. Good luck.

Julie Cameron-Doe:

Thanks. Our next question will be our last. Thanks, operator.

John DeCree:

Hi, everyone. Just one for me, maybe finish up with a quick capital allocation discussion. So I guess the share repurchase, a bit higher than we've seen in the quarter and also the tender for the Wynn Las Vegas notes. Julie or Craig. Curious if you could tell us how you're thinking about, you know, allocating capital in the quarter. And then as we look-ahead. We have the dividend and some CapEx that's on the horizon. So, you know, how are you kind of thinking about capital allocation for, you know, for things like we saw in the 3Q as well, but share repurchases are being opportunistic with your debt.

John DeCree:

Okay, that's helpful. Craig. I appreciate your thoughts. Congratulations on the quarter.

Julie Cameron-Doe:

Well, thank you. Thank you, everyone. So that will now conclude the Q3 earnings call for Wynn. Thank you for your interest and we look-forward to talking to you again.

Operator:

Thank you for participating on today's conference call. You may now go-ahead and disconnect.

Julie Cameron-Doe:

Thank you, operator, and good afternoon, everyone. On the call with me today are Craig Billings, Brian Gullbrants, and Steve Weitman in Las Vegas. Also on the line are Linda Chen, Frederic Luvisutto, and Jenny Holaday. I want to remind you that we may make forward-looking statements under Safe Harbor federal securities laws, and those statements may or may not come true. I will now turn the call over to Craig Billings.

Julie Cameron-Doe:

Thank you, Craig. At Wynn Las Vegas, we generated $224.1 million in adjusted property EBITDAR on $578.1 million of operating revenue during the quarter, delivering an EBITDA margin of 38.8%. Slightly lower-than-normal hold negatively impacted EBITDAR by around $2 million in Q2 and hold-normalized adjusted property EBITDAR was up 3% year-over-year. Our hotel revenue increased 6% year-over-year to $177.8 million, a new second quarter record on the back of an increase of 24,000 occupied room nights. Due to rooms that were out of service for renovations in Q2 2022. ADR, occupancy and RevPAR were all up slightly, compared to Q2 2022, despite the increase in available room nights, highlighting the appeal of our newly renovated room product. Our other non-gaming businesses saw broad-based strength across food and beverage, entertainment, and retail. In the casino, our GGR increased around 2% year-over-year, driven by a 14.8% year-over-year increase in slot handle and table drop that was roughly flat. Turning to Boston, we generated adjusted property EBITDAR of $69.1 million, an all-time property record. EBITDAR margin was 31.1%, up 80 basis points year-over-year. We saw broad-based strength across casino and non-gaming during the quarter. In the casino, we generated $193 million of GGR, a property record, with strength in both tables and slots. Our non-gaming revenue grew 3.8% year-over-year to $55.1 million with particular strength in hotel and food and beverage. We've stayed very disciplined on the cost side with OpEx, excluding gaming tax per day, of approximately $1.15 million in Q2 2023, up 3.6% year-over-year on increased business volumes and down 1% sequentially. As you may have seen in the press, we were pleased to recently sign new union agreements that provide our employees with competitive wages, benefits, and a best-in-class working environment that reflects our Wynn service standards. We expect the incremental OpEx from the new agreements to be partially offset by cost efficiencies we have identified in areas of the business that do not impact the guest experience. Additionally, I would like to note that business volumes in Q3 are temporarily being negatively impacted by the Sumner Tunnel Restoration Project the City of Boston is conducting that will be ongoing through August 31. The impact is primarily being felt in our table games business as both slots and non-gaming revenue continued to grow year-on-year in July. Our Macau operations delivered adjusted property EBITDAR of $246.2 million in the quarter on $769.9 million of operating revenue. As Craig noted, we held high in our VIP business, but this was more than offset by lower-than-expected hold on the mass table side. We were encouraged by the meaningful uptick in visitation and demand we experienced during the quarter, with particular strength in mass casino drop, direct VIP turnover, luxury retail sales, and hotel revenue, all above Q2 2019 levels. EBITDAR margin was 32% in the quarter, an increase of 280 basis points relative to Q2 2019, with Wynn Palace's margin reaching 33.4%, or 690 basis points above Q2 2019 levels. EBITDAR margin strength was driven by a combination of the favorable mix shift to higher margin mass gaming and operating leverage on cost efficiencies. In fact, our OpEx, excluding gaming tax, was approximately $2.2 million per day in Q2, a decrease of 29%, compared to $3.2 million in Q2 2019 and down 2% from Q1, despite the meaningful sequential increase in business volumes. The team has done a great job remaining disciplined on costs, and we're well positioned to continue to drive strong operating leverage as the business recovers over time. In terms of CapEx, we're currently advancing through the design and planning stages on our concession commitments. And as we noted the past few quarters, these projects require a number of government approvals, creating a wide range of potential CapEx in the very near term. As such, for 2023 through 2024, we expect CapEx related to our concession commitments to range between $300 million and $400 million. Turning to Wynn Interactive, our EBITDAR burn rate decreased both sequentially and year-over-year to $15 million in Q2 2023. Our team continues to stay disciplined on costs, while driving improved marketing efficiency. Moving on to the balance sheet. Our liquidity position remains very strong, with global cash and revolver availability of approximately $4.7 billion as of June 30. This was comprised of $1.8 billion of total cash and available liquidity in Macau and $2.9 billion in the U.S. Importantly, the combination of strong performance in each of our markets globally, with our properties run rating approximately $2.2 billion of annualized property EBITDAR, together with our robust cash and liquidity, creates a very healthy leverage profile for the company globally. We're also pleased to announce that the Board approved a cash dividend of $0.25 per share, payable on August 31, 2023 to stockholders of record as of August 21, 2023, highlighting our commitment to returning capital to shareholders. Finally, our CapEx in the quarter was $92 million, primarily related to the spa villa renovations and food and beverage enhancements at Wynn Las Vegas and normal course maintenance across the business. With that, we'll now open up the call to Q&A.

Carlo Santarelli:

Hey, Craig, Julie, everyone. Thank you for taking my question. So, Craig, just on the Macau front, obviously, the reduction sequentially in daily OpEx was a little bit of a differentiator relative to what we've seen in some peer reports. Can you talk a little bit more about that? And also, it looks as though your implied, commissions, discounts, et cetera, were as a percentage of revenue were down nicely sequentially. Do you expect, kind of, that trend to continue going forward?

Carlo Santarelli:

Great. And then if I could, Craig, a follow-up, turning to Las Vegas, obviously, very strong performance on the -- especially on the cost discipline side. Can you talk a little bit? I believe your labor contract actually ended in July. So I wouldn't have expected any impact, but could you talk a little bit about how you guys intend to kind of accrue for what may be a settlement and some new terms going forward or anything that was present in the 2Q perhaps?

Carlo Santarelli:

I've done plenty, plenty, I guess.

Carlo Santarelli:

Thank you.

Joe Greff:

Good afternoon, guys. Craig, when you look back at the 2Q, would you say in Macau, would you say Wynn Macau in the Peninsula was had a meaningful amount of renovation disruptor to the EBITDAR line that you would call out or do you think you were able to effectively shift what would otherwise have been disrupted to either other parts of the casino or to your property in Cotai?

Joe Greff:

Got it. And I'm presuming the renovation was completed at some point in June. If you can confirm that, but would you expect that Cotai and Peninsula would be more in balance going forward similar to 2019? Or do you think visitation dynamics are such where the Cotai region is just going to get a little bit more traction?

Joe Greff:

Got it. Okay. And then you called out, as others did in the 1Q and parts of the 2Q this reporting season, talking about low hold on the mass side. We can see the whole percentages the last couple of quarters versus what you did in 2019 at both properties. What is that a function of? Are players betting side bets or playing differently or is it really just a couple of quarters of aberrations and expected table hold percentages?

Joe Greff:

Great. Thank you.

Shaun Kelley:

Hi, good afternoon, everyone. Thanks for taking my questions. So Craig, maybe one more about Macau, but just wondering if you could give a little bit of color about, sort of, segments of business, what you're seeing across, particularly behavior wise, across premium mass and VIP. And I'm really thinking kind of spend per visit relative to what's left to recover on the visitation side as you look to see things normalize?

Q - Shaun Kelle:

Very helpful. And then, maybe one for you or Julie, just wanted to ask about the CapEx comment in the prepared remarks. I believe the call out was around some of the concession commitments and something around $300 million to $400 million. The question is, was that a per year number or is that a total number across kind of 2023 and 2024. And then if you can just remind us how you're thinking about sort of the CapEx versus possible OpEx components related to the -- that concession process. And I know it's a little different for everybody. And I know these plans are moving around some?

Craig Billings:

And then I would just point out that on the OpEx side, I would just like to remind you that there's a lot of things that we do in the business today that already support nongaming. And so we don't expect all of that to be incremental.

Operator:

Thank you. Our next caller is Stephen Grambling with Morgan Stanley. You may go ahead, sir.

Craig Billings:

The 120 -- sure. The 120% that I referenced was drop. So it has no -- so Wynn obviously has no impact. And OpEx, no expectation of any material changes in OpEx.

Craig Billings:

Julie, do you want to take the first portion of that, and I'll take the second?

Craig Billings:

About the free cash flow.

Craig Billings:

Yes. We're well capitalized at the moment. And I expect we will maintain some extra liquidity until we really see how a few things play out. First is New York. The second is the macro economy and the third is the yield curve. And we're always looking at the markets, the capital markets and thinking about when to refinance and whether to do it dollar-for-dollar or modestly delever. And when to return capital to shareholders, primarily by adding to the dividend. So we're in a bit of a wait-and-see approach at this moment. But if you think about it, we've got a great project in the UAE that is going to be a stunner. We've reinitiated our dividend, and our leverage is well under control. So we feel pretty good about where we are.

Craig Billings:

Sure.

Q – David Katz:

Good afternoon, everyone. Thanks for taking my question. I'm hoping for just a little more insight on margins in Macau. It's been one of the questions that -- trying to figure out what the new normal is or could be longer term as we think about the future, largely driven by revenue mix. I wonder what updated thoughts you may have versus what we would have had 90 days ago. Or more than that when I was over to visit, where it was the prevailing question. Thank you.

David Katz:

Right. And leaving it to us to decide on the order of magnitude, but it is fair to assume that there still should be some margin upside in Macau still to be captured as volumes return, correct?

David Katz:

Okay, I’ll take it. Thank you very much. Appreciate it.

Brandt Montour:

Hey, good evening, everybody. Thanks for taking my question. So in Las Vegas, obviously, a great result there. REVPAR and ADR were flat to up small year-over-year. Just curious, how you're feeling about taking rate from these levels that you're at. Today, obviously, occupancy is pretty full. And looking out in the back half of the year, how do you feel about your comparisons -- sort of cadence, third quarter, fourth quarter, as well as the sort of financial impact or the hotel impact from F1 in the fourth quarter?

Brian Gullbrants:

Sure. Yes. I mean if you look at -- our forward-looking demand indicators are really remaining quite healthy. The room bookings we have are pacing up year-over-year. And as far as group pace, it continues to be strong. We've mentioned it on previous calls, Q3 and Q4 continue with the same pace that we've had thus far this year. So 2023 will wind up being a record group year. And '24 continues to pace ahead of that. So we keep looking for the signs, but lead volume is there, and our team does a great job of converting.

Craig Billings:

Sure. We have everything we need to operate gaming in Al Marjan. And I think there's confusion here because there's a lack of understanding regarding individual Emirates versus the UAE as a whole. It's clearly a 10, as I think I've talked about before to a state and federal system. So while there may be conversation in other Emirates about legalization or legalization at the federal level, thereby covering all Emirates, I expect that we will have our license for Ras Al Khaimah actually imminently. But there should be no concern that there is a legalization process that needs to occur in order for a broader legalization process in order for gaming to occur in that property.

Craig Billings:

Sure.

Daniel Politzer:

Hey, good afternoon, everyone. Thanks for taking my questions. On prior calls, I think you mentioned that you could get back to a run rate EBITDA -- and I think it was about $26 billion, $27 billion range for GGR. I mean given what you're seeing in terms of mix and margin, is that still achievable? And going back to that July under 20% data point that you gave, is this something that maybe is achievable in the back end of this year?

Daniel Politzer:

Got it. And then just for my follow-up. In terms of Wynn Macau, you mentioned you're going to be fighting for share there. Is that -- is it fair to say that margins maybe come down a little bit from these current levels? And I guess more broadly, as it relates to premium mass, are you seeing an uptick in promotions within that segment?

Daniel Politzer:

Got it. Thanks, that’s helpful.

Chad Beynon:

Good afternoon. Thanks for taking my question. I wanted to ask about the Interactive cash burn. You mentioned that that's come down again year-over-year and sequentially. Are you still on track for this to turn profitable in the fourth quarter? And any other kind of insights in terms of where this is going and how the flow-through should look if revenues rise from here during peak season? Thanks.

Julie Cameron-Doe:

Yes. Just -- I mean the sports betting's a tough business. It's about the game of commodity. They're difficult businesses, but we're very focused on managing this business. We've got a very long-term shareholder-friendly view on it. So that's our focus.

Craig Billings:

Every customer matters, Chad. It's -- of course, we want to see the underlying regions start to contribute to Macau. Are we dependent on it? No. But certainly, that's going to add incremental heft to the recovery, and that's going to add incremental heft to the total market, which again pushes us further back towards breakeven. Sorry, breakeven with 2019 or equal to 2019.

Craig Billings:

Sure.

John DeCree:

Thanks for taking my questions. Maybe just a two-part question on Las Vegas. Craig, to the extent you can provide maybe a little bit more color around the visibility you have for the big events like F1 or Super Bowl. And then maybe the second part of that question is when you look at your forward demand indicators for bookings, is -- how much of that kind of year-on-year growth is tethered to those events? And excluding those events, are you still seeing good booking indicators for those maybe less peak periods or less kind of event-driven periods?

Brian Gullbrants:

Sure. Yes, I think both of these events, specifically F1 and then Super Bowl, definitely played to the strengths of our brand. It's a perfect match. We are getting significant premiums for those two events themselves. And I think we're pacing quite nicely. I know some of our competitors have given more specific data, but I can tell you we're going to do just fine here.

Julie Cameron-Doe:

Thanks, John. And operator, the next question will be our last.

Robin Farley:

Great. Thank you for letting me sneak in here at the end. Can you clarify just to sort of make it comparable to previous periods, what the VIP hold added to make EBITDA in Macau?

Julie Cameron-Doe:

Holding back to VIP. I mean as we said on the call, we held a little bit high on VIP, but that was more than offset by lower mass hold. So we're not actually getting into breaking it out.

Craig Billings:

It was about $20 million. So we have $20 million of high hold on VIP. This is what I was alluding to earlier. We need to -- we're going to start normalizing for mass hold, because so much of our business now is mass. But it's about $20 million in Macau, and low mass hold more than offset that, as Julie said.

Craig Billings:

Well, in the midst of -- in the midst of the dark days of COVID, we put out a permanent cost savings figure, and we've held to that. We certainly, again, learned to run our business differently during COVID. And what I would say is that our business volumes over the course of the past 1.5 years have been absolutely off the charts, and we've held the line and still held true to the brand. So the business kind of is the business now. To the extent that there is a macro -- any macro-driven change to our business volumes or to our ADRs, et cetera, we have a playbook for that, because we just lived it as we went through COVID, and we'll be ready. Again, we're not seeing that. But we're certainly ready for every scenario.

Julie Cameron-Doe:

Well, thank you, operator. With that, that concludes the Q2 earnings call. Thanks, everybody, for your attention. We look forward to talking to you again soon.

Julie Cameron-Doe:

Thank you, operator, and good afternoon, everyone. On the call with me today are Craig Billings and Brian Gullbrants in Las Vegas. Also on the line are Linda Chen, Frederic Luvisutto and Jenny Holaday. I want to remind you that, we may make forward-looking statements under safe harbor federal securities laws, and those statements may or may not come true. I will now turn the call over to Craig Billings.

Julie Cameron-Doe:

Thank you, Craig. At Wynn Las Vegas, we generated an all-time record of $231.6 million in adjusted property EBITDA on $586.8 million of operating revenue during the quarter. Higher-than-normal hold positively impacted EBITDA by around $4 million in Q1. Our hotel occupancy was 88.8% in the quarter, up 1,190 basis points year-over-year and up 620 basis points versus Q1 2019. Importantly, we've stayed true to our luxury brand and continue to compete on quality of product and service experience with our overall ADR reaching a record $493 during Q1 2023, up 14.1% versus Q1 2022 and 46% above Q1 2019 levels. Our other non-gaming businesses saw broad-based strength across food and beverage, entertainment and retail, which were up nicely year-over-year and also well above pre-pandemic levels. In the casino, our Q1 2023 slot handle increased 33.5% year-over-year and with 99% of our Q1 2019 level. Similarly, our table drop was up 9.6% year-over-year and was 49% of our Q1 2019 levels. The team in Vegas has done a great job of controlling costs without negatively impacting the guest experience, delivering adjusted property EBITDA margin of 39.5% in the quarter. On a hold-normalized basis, our EBITDA margin was up approximately 300 basis points year-over-year at approximately 1,400 basis points compared to Q1 2019. OpEx excluding gaming tax per day was $3.7 million in Q1 2023, which was flat sequentially and up 20% compared to Q1 2019 levels, but well below the 46% increase in operating revenues. Turning to Boston. We generated adjusted property EBITDA of $63.4 million with EBITDA margin of 29.3%. We saw broad-based strength across casino and non-gaming during the quarter. In the casino, we generated $191 million of GGR, a property record with strength in both tables and slots. Our non-gaming revenue grew 21% year-over-year to $50.9 million with particular strength in hotel and food and beverage. We've stayed very disciplined on the cost side with OpEx excluding gaming tax per day of approximately $1.17 million in Q1 2023. This is up relative to Q1 2022 on increased business volumes and flat sequentially. As we've discussed on prior calls, the year-over-year EBITDA and OpEx comps were impacted by contractual labor agreements, which added around $45,000 per day to our OpEx base beginning late in Q2 2022. We're well positioned to drive strong operating leverage as we continue to grow the top line over time. Our Macau operations delivered adjusted property EBITDA of $155.8 million in the quarter on $600.1 million of operating revenues. Lower-than-normal VIP hold negatively impacted EBITDA by around $10 million in Q1. As Craig noted, we were encouraged by the meaningful uptick in visitation and demand we experienced during the quarter with particular strength in mass casino and luxury retail sales. Our OpEx excluding gaming tax was approximately $2.3 million per day in Q1, a decrease compared to $3.2 million in Q1 2019 and up modestly from Q4 despite meaningful sequential increase in business volumes. The team has done a great job remaining disciplined on costs, and we're well positioned to drive strong operating leverage as the business recovers over time. In terms of CapEx, we're currently advancing through the design and planning stages on our concession commitments. And as we noted last quarter, these projects require a number of government approvals, creating a wide range of potential CapEx in the very near term. As such, for 2023, we continue to expect CapEx related to our concession commitments to range between $50 million to $220 million. Turning to Wynn Interactive. Our EBITDA burn rate decreased both sequentially and year-over-year to $21.1 million in Q1 2023. Our team continues to stay disciplined on cost, while driving improved marketing efficiencies. Moving on to the balance sheet. Our liquidity position remains very strong with global cash and revolver availability of approximately $4.7 billion as of March 31. This was comprised of $1.6 billion of total cash and available liquidity in Macau and $3.1 billion in the US. Importantly, the combination of very strong performance in Las Vegas and Boston with the properties generating over $1.1 billion of adjusted property EBITDA in the 12 months through March 31, together with our robust liquidity, creates a very healthy leverage profile in the US. As Craig noted, with our properties performing well in each of our markets and our robust liquidity, we're pleased to announce that the Board approved the resumption of our quarterly dividend with a cash dividend of $0.25 per share payable on June 6, 2023, to stockholders of record as of May 23, 2023, highlighting our commitment to prudently returning capital to shareholders. Finally, our CapEx in the quarter was $124 million primarily related to the spa and villa renovations and F&B enhancements at Wynn Las Vegas and normal course maintenance across the business. With that, we will now open up the call to Q&A.

Carlo Santarelli:

Hey, everyone. Thanks for taking my question. Craig, as you talked about some of the work you guys are doing on the peninsula at that asset, how much of the, I guess, trailings of that asset relative to Cotai is related to the work versus how much of the overall recovery that you've experienced or the market has experienced in Cotai? How much does the peninsula lag that? And what do you think -- or what do you think it takes to narrow that gap in the resumption of attempting to attain 2019 levels in both geographies?

Carlo Santarelli:

Thank you. That's helpful. And then as a follow-up, obviously, there's plenty of development activity. There's obviously some spend on Cotai, and your contributions down the road for the UAE development. What was the primary thought process and driving factors and the decision to reinstitute the dividend?

Carlo Santarelli:

Great. Thank you, Craig.

Operator:

Thank you. Our next caller is Joe Greff with JPMorgan.

Craig Billings:

Well, thanks, Joe. The market is structurally different than it was in 2019 and before for a few reasons. I think the change in the junket environment and the shift to mass is well understood. On the OpEx side, the concessionaires were encouraged to and generally did maintain labor throughout the course of the shutdown. There are components of the labor pool where I think all of us were able to -- particularly with respect to some foreign labor, where we were able to trim. And so I think I've heard comments from some of our competitors that they were bringing labor back on, particularly on the housekeeping side, et cetera, et cetera. I think that's generally true for us. We have been operating at full capacity since the day the market reopened. We're probably light in a couple of labor categories, not high-dollar labor categories. So I don't think we're in a situation where certainly our fixed costs are going to meaningfully accelerate as the market accelerates. And I would expect some pretty healthy operating leverage coming out of the business over the course of the next couple of years. If you look at where Palace printed this quarter, you can look at that relative to 2019, and you can see that there was distinct margin improvement. Our service levels certainly haven't degraded versus 2019. So I'm pretty bullish.

Craig Billings:

Well, I would just say our average EBITDA per day in April was up over our average EBITDA per day in Q1. You saw what the market did. The market grew quite healthy from both February to March and then March to April. And we had 14% share in the first quarter. So I think you can probably do the math from there.

Craig Billings:

Sure.

Shaun Kelley:

Hi. Good afternoon everyone. Thank you for taking my question. Just was hoping we could get a little bit more color on the recovery you're seeing maybe in the VIP segment. So obviously, I think you called out direct being, I think, double over the Golden Week holiday. But maybe just in general, how you're serving that higher-end customer where you see them playing on the floor? Just kind of behaviorally, how has the market kind of adapted and adjusted to that and how your direct program has evolved as well?

Shaun Kelley:

Thank you for that. And then as my follow-up, could you just -- going back to the renovations for a second on the Peninsula, your expectations for when those should conclude or if they don't conclude entirely sort of become materially less of a headwind from here, how long that program is expected to last?

Shaun Kelley:

Thank you very much.

Dan Politzer:

Hey, good afternoon everyone. Thanks for taking my questions. I wanted to actually pivot to Wynn on margin. Can you maybe talk about how we should think about this property evolving over time in terms of the timing of your capital commitment, maybe the financing breakdown versus the equity contributions versus debt, gaming versus non-gaming? Just any additional color. And I appreciate that the presentation was pretty thorough. But just as we think about this going forward and over the next few years, that would be helpful. Thank you.

Dan Politzer:

Got it. And then just in terms of Macau, I know there was a couple of moving pieces in the quarter. Is there any way to maybe quantify -- and I recognize that this is not something you would typically adjust for, but that mass hold in the quarter in terms of the impact to EBITDA, as well as that construction disruption and just as we think about in a normalized scenario going forward, that would be helpful.

Dan Politzer:

Got it. Thanks.

Robin Farley:

Great. Thanks. I just wanted to circle back to your comments about VIP hold, and the fact that it was at two times the level of 2019 your direct business for Golden Week. If we think about your direct VIP business in 2019 being maybe 15% of total VIP, is it reasonable to think you could get back to 30% of previous VIP levels or even higher since this is really just out of the box here under the new regulations?

Robin Farley:

I mean, that's what I was suggesting. In other words, if you were at two times the level already for Golden Week that you could -- in other words, is there a reason that wouldn't be a sustainable rate of recovery of your previous what was direct, that you'd be able to recapture some of what have been junket business at that same level or even higher?

Robin Farley:

Okay. Thank you.

Julie Cameron-Doe:

We will take one last question operator.

John DeCree:

Hi. Good afternoon. Everyone thank you taking my question. Maybe bring the conversation back home for one in Las Vegas, obviously, a fantastic quarter for you guys in the market as a whole. And two kind of customer segments that we're paying attention to is the international customer and convention recovery. Presumably, we've seen both of those kind of accelerate in 1Q. So curious to get your thoughts on where the recovery of those two segments are for Wynn specifically and how much room you see in front for those kind of two customer segments relative to 2019?

Brian Gullbrants:

Sure. Thanks, Craig. John, yeah, I would say that group is back beyond 2019 levels at this point. When you look to Q1 and what we did, the team did an amazing job. We had one of our best -- well, we had the best convention group revenue we've ever had. We had all the stars line up, CES, Homebuilders, CONEXPO. It was just a phenomenal quarter, which then helped drive the record quarter. If you look forward, I think the group business is solid. Our team has done a great job. We're pacing towards record group room nights for this year with very strong ADRs. We built a solid base that will allow us to yield manage our rooms in the other segments as we move forward. And right now, 2024, knock on wood, 2024 is actually pacing ahead of what we believe will be a record 2023. So yes, we're back to beyond 2019 levels, and we see this right now continuing. We're looking for the signs. Don't see any signs of softening yet, but we're going to be cautious and reactive we have to. But right now, it looks pretty good.

John DeCree:

Thanks. That's really helpful. Maybe as a follow-up, one more on Macau. Craig, could you kind of give us your insights on the competitive landscape, I guess, particularly on the direct VIP and premium mass? It seems like there's been plenty to go around so far in early recovery, but curious to get your updated thoughts on player reinvestment and how competitive or promotional the market has been, if at all.

John Decree:

Yes. That sounds very encouraging, Craig. Thanks so much and thanks everyone. Congratulations on a great quarter.

Julie Cameron-Doe:

Thank you. Well, with that, we'll close the call. Thank you for your interest in Wynn Resorts and we look forward to sharing more information with you next quarter.

Julie Cameron-Doe:

Thank you, operator, and good afternoon, everyone. On the call with me today are Craig Billings, Brian Gullbrants, and Steve Whiteman [ph] in Las Vegas. Also on the line are Ian Coughlan, Linda Chen, Frederic Luvisutto and Jenny Holaday. I want to remind you that we may make forward-looking statements under safe harbor federal securities laws, and those statements may or may not come true. I will now turn the call over to Craig Billings.

Julie Cameron-Doe:

Thank you, Craig. At Las Vegas, we generated a fourth quarter record of $219.3 million in adjusted property EBITDA on $585.5 million of operating revenue during the quarter, lower-than-normal hold negatively impacted EBITDA by around $10.5 million in Q4. Our hotel occupancy was 89.9% in the quarter, up 350 basis points year-over-year and up 50 basis points versus Q4 2019. Importantly, we've stayed true to our luxury brand and continued to compete on quality of product and service experience with our overall ADR reaching a record $492 during Q4 2022, up 11.8% versus Q4 2021 and 53% above Q4 2019 levels. Our other non-gaming businesses saw broad-based strength across F&B, entertainment and retail, which were up nicely year-over-year and also well above pre-pandemic levels. In the casino, our Q4 2022 slot handle increased 20.9% year-over-year and was 69% above Q4 2019 levels. Similarly, our table drop was up 1.1% year-over-year and was 43% above Q4 2019 levels, despite still suppressed international play during the quarter due to COVID-related travel challenges. The team in Vegas has done a great job of controlling costs without negatively impacting the guest experience, delivering adjusted property EBITDA margin of 37.4% in the quarter. On a hold-normalized basis, our EBITDA margin was up approximately 1,300 basis points compared to Q4 2019. OpEx, excluding gaming tax per day was $3.8 million in Q4 2022, up 25% compared to Q4 2019 levels but well below the 59% increase in operating revenue. In Boston, before getting into the details, I'd like to point out that following the closing of the sale leaseback transaction on December 1, we're now reporting adjusted property EBITDAR for this business. In Q4 2022, we generated adjusted property EBITDA of $63.3 million with EBITDA margin of 29%. We saw broad-based strength across casino and nongaming during the quarter. In the casino, we generated $190 million of GGR, a property record with strength in both tables and slots. Our nongaming revenue grew 13% year-over-year to a record $56.8 million with particular strength in the hotels, driven by 93.9% occupancy and a $404 ADR. We've stayed very disciplined on the cost side with OpEx, excluding gaming tax per day of approximately $1.17 million in Q4 2022. This was a decrease of over 8% compared to $1.3 million per day in Q4 2019 and up modestly relative to Q3 2022. As we've discussed on prior calls, the year-over-year EBITDA and OpEx comps were impacted by a combination of contractual labor agreements, which added around $45,000 per day to our OpEx base, beginning late in Q2 2022, along with a nonrecurring benefit of $2 million in Q4 last year. We're well positioned to drive strong operating leverage as we continue to grow the top line over time. Our Macau operations delivered an EBITDA loss of $59.1 million in the quarter on $190.3 million of operating revenues. Lower than normal hold negatively impacted EBITDA by around $25 million in Q4. While the COVID situation in the region was challenging during Q4, as Craig noted, we were encouraged by the meaningful uptick in visitation and demand we experienced during the recent Chinese holiday period. Our OpEx, excluding gaming tax, was approximately $2 million per day in Q4, a decrease compared to $2.4 million in Q4 2021. The team has done a great job remaining disciplined on costs in a difficult operating environment. Longer term, we are well positioned to drive strong operating leverage as the business recovers over time. In terms of the new concession, we approached the tender process very prudently, carefully balancing our commitments to the government with our responsibilities to our shareholders and, of course, our liquidity position. We're currently advancing through the design and planning stages, but these projects require a number of government approvals creating a wide range of potential CapEx in the very near term. As such, for 2023, we expect CapEx related to our concession commitments to range between $50 million to $220 million. Our future non-gaming investments, including new center set to be home of a unique spectacle show and innovative food halls and an events and entertainment center. As Craig noted, we believe these investments play into our strength as we have a demonstrated track record of introducing innovative non-gaming investments that drive increased tourism and ultimately, strong shareholder returns. Turning to Wynn Interactive. Our EBITDA burn rate increased sequentially to $28.3 million in Q4 2022. However, adjusting for the well-publicized World Series bet that Craig mentioned, it was roughly flat with our Q3 2022 burn rate of $17.7 million. The team continues to control costs while driving improved marketing efficiencies. Moving on to the balance sheet. Our liquidity position remains very strong with global cash and revolver availability of approximately $4.5 billion as of December 31. This was comprised of $952 million of total cash and available liquidity in Macau and $3.5 billion in the U.S. These numbers exclude the undrawn $500 million intercompany revolving credit facility Wynn Resorts entered into with Wynn Macau. We were pleased to close the sale leaseback transaction for the real estate of Encore Boston Harbor on December 1 with gross proceeds of $1.7 billion, further bolstering our already strong liquidity position. Importantly, the combination of very strong performance in Las Vegas and Boston, with the properties generating $1.04 billion of adjusted property EBITDA during 2022 together with our robust liquidity, creates a very healthy leverage profile in the U.S. With our properties performing well in each of our markets and our robust liquidity, I'd like to note our intention to repay our upcoming May 2023, Wynn Las Vegas bond maturity with cash from the balance sheet, reducing our domestic gross leverage by $500 million. Finally, our CapEx in the quarter was $27 million, primarily related to normal course maintenance. With that, we'll now open up the call to Q&A.

Carlo Santarelli:

Craig, Julie, whoever wants to kind of take this one. Craig, I know you spoke a little bit about kind of what you guys saw in Macau during Chinese New Year. To the extent you're willing to kind of comment on what you've seen in the aftermath and kind of the weeks following the holiday, that would be great.

Frederic Luvisutto:

Sure, Craig. Thank you, Carlo. We have seen typically after post Chinese New Year in the past, the period does see a slowdown. But we have been very encouraged to see the business remaining very, very strong with mass gaming, direct VIP and retail sales better than previously similar period in the past. So, we have seen the resilience of the business post Chinese New Year, I'm very encouraged with that.

Craig Billings:

Yes. There was some junket activity over the course of Chinese New Year. Obviously, the situation has changed a lot from the pre-COVID period. I think it's actually a little bit too early to call out what role the gaming promoters and the junkets will play in the market, but there certainly was some activity.

Joe Greff:

Sort of following on Carlo's question, on what you saw in Chinese New Years in the period. Since then, can you talk about the migration of the junket VIP business into the direct and into the premium mass component of your mass business? How do you -- so do you think -- what otherwise would have been the junket, what percentage of that do you think is migrating versus maybe not coming back quite yet?

Joe Greff:

And when you look back in 2019, we always thought that the direct VIP component was something around 10% to 20% of the total VIP turnovers. Are we fair in picking that? Can you remind us of that?

Joe Greff:

Okay. That’s all for me. Thank you.

Shaun Kelley:

Just was hoping to get a little bit more color on maybe the cost and margin picture as things start to rebound in Macau. Julie, I think in the prepared remarks, you mentioned you were down around $2 million a day in the fourth quarter in Macau, if I called it correctly, down from $2.4 million back in 2019. Just as you're sort of re-ramping, I mean, I think we all really underappreciated the amount of operating leverage that was going to happen in certain markets in the United States, and kind of trying to put some of the tea leaves together around how this may play out for Macau. So just any kind of thoughts on expenses and margins as the recovery begins here?

Craig Billings:

And I would just add, it's primarily a mass mix now. So, you're going to have -- that's inherently higher margin. And a portion of the cost savings that we implemented during the COVID period, which, thank God is long behind us, we will maintain. So, the margin profile should be healthy. So again, it's -- we're really talking about a couple of weeks here. So, it's a little bit early to start forecasting specific margins.

Julie Cameron-Doe:

Sure. So, I think just taking a step back, if you think about our total commitment when we put through our concession proposal, we've committed to $2.2 billion over 10 years. And that's -- obviously, that's a mix of CapEx and OpEx. But we're very focused on getting the CapEx done as quickly as possible so that we can start to drive strong returns from it. The limiting factor is really the approval that we need locally to break ground and build anything. So, it's really not in our hands. That's why we've given such a wide range because from our perspective, we're pacing towards getting through our D&D and designing everything, but we have to go through government approvals for anything that's construction related. So, the range we gave was $50 million to $220 million.

Cassandra Lee:

Hi. This is Cassandra on behalf of David. You mentioned that digital was nearly broke even in the fourth quarter, excluding the -- resorts. Can you discuss the upcoming launches and whether we should expect the business to inflect to profit this year?

Cassandra Lee:

Great. If I may follow up. Can you talk about your upcoming maturity? And any thoughts about tapping to the capital market now since we have seen some activity in the last few weeks?

Operator:

Our next caller is Robin Farley with UBS.

Craig Billings:

Hi Robin. Yes, I'm not sure you've been talking to, Frederic just mentioned that actually we've been performing above what we would normally see during that drop-off period.

Craig Billings:

No. He was talking business volumes.

Craig Billings:

It's a week, right? In the grand scheme of things, it's a week. So, it's hard to read any tea leaves in a week. What I would say is that the market roared back, Macau was a rager on the mass side, on the direct VIP side, on the retail side and on the occupancy side during Chinese New Year, and it outperformed our expectations for the lull period shortly thereafter. Anything beyond that, it's just too early to read.

Craig Billings:

The former.

Daniel Politzer:

I wanted to circle back on the $4 million EBITDA per day for Chinese New Year that you mentioned. Is there any way you could put that into historical context, I don't know what it was in 2019 or during other Golden Week or Chinese New York periods?

Daniel Politzer:

Understood. And then, just pivoting to Las Vegas. I mean, to what extent since China is effectively reopened, have you seen that high-end Asia business kind of resurface your Vegas property?

Julie Cameron-Doe:

Operator, the next question will be the last one.

Stephen Grambling:

I may have missed this. But in Las Vegas, can you just provide any additional color on what you're seeing in terms of forward bookings, not only in -- I guess, the first quarter should be particularly strong, but even as we look out over the course of the year, what you're seeing, and any expectations as it relates to kind of convention mix?

Brian Gullbrants:

Absolutely. As we look to '23, not only were we pacing strong coming out of '22 going into '23, has just accelerated. I'm so excited about what we've got coming in '23. When you look at it, we've got the best teams in the business. We've got the best assets in the business. In Vegas, we've got strong pace of group, particularly as we look forward into '23 and then even beyond. Q1 may be a record for us. It's just really done well. We have strong pricing power in every channel. We got a new show we just launched with Awakening. We've got several projects coming in '23 that are really exciting. And then we kind of kicked things at the end, up a notch with F1 in November. So our outlook for the year, pending no other macroeconomic impacts looks pretty good. We're feeling pretty good about what we can see right now. So on the group side, very strong.

Stephen Grambling:

Fair enough. Then if I can just sneak in a quick follow-up on Macau. As you think about how to grow the direct VIP business, you're thinking about that as an opportunity. Is one way to think through maybe some of the customers who’re used to that, both VIP and in the mass market segment as a target customer? And is there any way to frame how big that business could grow?

Julie Cameron-Doe:

Okay. Well, with that, we'll now close the call. Thank you all for your time today and your support of Wynn Resorts. We look forward to updating you very soon.

Operator:

Thank you for participating on today's conference call. You may now disconnect.

Julie Cameron-Doe:

Thank you, operator, and good afternoon, everyone. On the call with me today are Craig Billings and Brian Gullbrants in Las Vegas. Also on the line are Ian Coughlan, Linda Chen, Frederic Luvisutto and Jenny Holaday. I want to remind you that we may make forward-looking statements under safe harbor federal securities laws, and those statements may or may not come true. I will now turn the call over to Craig Billings.

Julie Cameron-Doe :

Thank you, Craig. At Wynn Las Vegas, we generated a third quarter record of $195.8 million in adjusted property EBITDA on $544.4 million of operating revenue during the quarter. Lower-than-normal hold negatively impacted EBITDA by around $12 million in Q3. Our hotel occupancy was 88.8% in the quarter, up 580 basis points year-over-year and up 90 basis points versus Q3 2019. Importantly, we've stayed true to our luxury brand and continue to compete on quality of product and service experience, with our overall ADR reaching $426 during Q3 2022, up 8.7% versus Q3 2021 and 39% above Q3 2019 levels. Our other non-gaming businesses saw broad-based strength across food and beverage and retail, which were up nicely year-over-year and also well above pre-pandemic levels. In the casino, our Q3 2022 slot handle increased 31.6% year-over-year and was 72.2% above Q3 2019 levels. Similarly, our table drop were up 12.5% year-over-year, and was 32.4% above Q3 2019 levels despite still suppressed international play during the quarter due to COVID-related travel challenges. The team in Vegas has done a great job of controlling costs without negatively impacting the guest experience, delivering adjusted property EBITDA margin of 36% in the quarter. On a hold-normalized basis, our EBITDA margin was up approximately 1,300 basis points compared to Q3 2019. OpEx, excluding gaming tax per day was $3.6 million in Q3 2022, up 10% compared to Q3 2019 levels, but well below the 36% increase in revenue due to lower headcount and broad-based cost efficiencies in areas that do not impact the guest experience. We remain committed to maintaining a cost structure that appropriately balances margins and our exacting service standards. In Boston, we generated adjusted property EBITDA of $61.1 million in Q3 2022 with EBITDA margin of 28.9%. We saw broadband across casino and nongaming during the quarter. In the casino, we generated $184 million of GGR, a property record with strength in both tables and slots. Our nongaming revenue grew 33% year-over-year, with particular strength in the hotel, driven by 97% occupancy and a $398 ADR. We stayed very disciplined on the cost side with OpEx, excluding gaming tax per day of approximately $1.1 million in Q3 2022. This was a decrease of over 10% compared to $1.3 million per day in Q4 2019 and broadly in line with Q2 2022. As we've discussed on prior calls, the year-over-year EBITDA and OpEx comps were impacted by a combination of contractual labor agreements, which added around $45,000 per day to our OpEx base beginning late in Q2 2022, along with a onetime benefit of $3 million in Q3 of last year. We're well positioned to drive strong operating leverage as we continue to grow the top line over time. Our Macau operations delivered an EBITDA loss of $65.6 million in the quarter on $115.6 million of operating revenue as the COVID situation in the region has continued to suppress visitation. As Craig noted, while the business has remained challenging, we experienced some encouraging pockets of demand during the October Golden Week holiday period, particularly in our direct VIP and retail businesses. Our OpEx, excluding gaming tax, was approximately $1.6 million per day in Q3, a sequential decrease compared to $1.9 million per day in Q2 2022. The team has done a great job remaining disciplined on costs in a difficult operating environment. Longer term, we're well positioned to drive strong operating leverage as the business recovers over time. Turning to Wynn Interactive, our EBITDA burn rate improved to $17.7 million in Q3 2022, from $1 million in Q2 2022, primarily driven by improved marketing efficiency and disciplined OpEx control. Moving on to the balance sheet. Our liquidity position remains very strong with global cash and revolver availability of approximately $2.8 billion as of September 30. This was comprised of $997 million of total cash and available liquidity in Macau and $1.8 billion in the U.S. These numbers exclude the undrawn $500 million intercompany revolving credit facility when resorts entered into with Wynn Macau. Our previously announced sale leaseback transaction for the real estate of Encore Boston Harbor remains on track to close before the end of the year. Pro forma for the transaction, we have approximately $4.4 billion of consolidated global cash and liquidity. Importantly, the combination of very strong performance in Las Vegas and Boston, with the properties generating trailing 12-month EBITDA of over $1 billion, together with our robust liquidity, creates a very healthy pro forma leverage profile in the U.S. Finally, our CapEx in the quarter was $87 million, primarily related to the Awakening theater at Wynn Las Vegas and normal course maintenance. With that, we will now open up the call to Q&A.

Carlo Santarelli :

Guys, I just wanted to kind of talk a little bit about what both of you mentioned as it pertain to the uptick that you're seeing in Macau. How much of that at this point do you think you could perhaps -- and I understand it's kind of direct VIPs, so a smaller number of players can really move the needle. But how much of a change have you seen since the Visa policies were tweaked a little bit? And with respect to the comments you made on nongaming, is there potentially something that's kind of brewing, that's swiftening the pace a little bit of the return of customers?

Ian Coughlan :

I'd just like to clarify that for e-Visas they haven't really gotten moving yet, they reopened on the 1st of November. So it wouldn't have had an effect on October activity. So the activity that we saw in our VIP area and premium is linked to a certain extent to returning former junket players. We also saw a Chinese New Year. So we believe it's our premium positioning in the market and the facility and services that we offer make us attractive to those players, and there will be a return of them in the future.

Craig Billings :

Sorry, anything is possible, Carlo, but the pre-established timeline has been year-end.

Craig Billings :

Yes, sure. I think I mentioned on a previous call that the more time we spend over there, and I was just over there recently, the more we believe in the nongaming elements of that market. It's a tremendous nongaming leisure and luxury market. And as I mentioned in my prepared remarks, we're in the pretty late stages now of programming. So essentially determining what we're going to build, not how it's going to look per se. And given that it's a man-made island without any existing development, it's an incredibly flexible location on which to plan. For example, if you want to move a beach, you move a beach. So it's a really exciting project. And we've sought to maximize the relationship of the facility to its surroundings, particularly in the nongaming amenities like food and beverage wellness and really take advantage of such a unique location. Meanwhile, the casino component, where at least for some period of time, we will be operating on our own, which makes it quite exciting is shaping up to be somewhat larger than Wynn Las Vegas, but with numerous pockets of energy and compression. And so striking that balance is important. When you think about a market like that where you for some period of time, we will be the only operator, you certainly don't want to underbuild the casino, but you want to maintain that sense of energy. So I think the property is going to be a stunner, and we look forward to sharing more in early 2023.

Joseph Greff :

I was hoping you can talk about Las Vegas, Craig, and a way that's going to be a little bit different than how you and your strip peers talked about trends up until recently, specifically about programming. Can you discuss maybe in this way, that would be helpful as we try to ascertain the sustainability of currently strong trends. Can you talk about how many programming events do you have for the first half of next year versus the first half of this year if visibility stretches out for the full year of next year? And can you compare that to full year of '22? Is there a general rule of thumb relating to incremental revenues of an average programming event?

Joseph Greff :

Great. And then, Craig, my second question relates to a topic that you might be limited in fully answering. We also have Tilman for filing 13G filing last week. So my questions are

Operator:

The next question is from Shaun Kelley with Bank of America.

Craig Billings :

Yes, sure. I'll turn that one over to Brian.

Craig Billings :

And I would just add to that. As you know, Shaun, we don't target margin in any particular quarter, right? We target prudent management of our resources in order to deliver an experience that is consistent with the brand. We learned a lot during COVID, a lot. We are more nimble than we have ever been with respect to OpEx. And so we're running the business with less people. We're delivering on the brand promise as well as or better than we have historically, and that's how we manage the business.

Craig Billings :

Ian, you want to take that?

Operator:

The next question is from David Katz with Jefferies.

Craig Billings :

Sure. So look, in the long term, we think about this business, as I've said on prior calls, we think about it really over the longer term. And in particular, iCasino, where we've had pretty reasonable success and our brand has real currency. As we've said before, what we aren't -- and I think we were the first to say so. What we aren't willing to do is burn billions of dollars between now and then, and we've done that. If you look at our results for Q3 year-over-year, we had almost the same total handle in both Q3 2022 and Q3 2021 on a 90% reduction in marketing spend and an 80% reduction in burn. Because our initial customer cohorts continue to play with us, generating revenue, and we're being very thoughtful with respect to user acquisition and promos. With Massachusetts coming up, I would expect a modest uptick in UA, but nothing earth shattering because we have a sizable database there. And we're highly likely to have retail sports betting without mobile for a while. So the goals at this point are to launch Massachusetts, and as you said, achieved breakeven and then grow as the market does, particularly in iGaming, where again, our brand has currency, and we can ultimately drive the best digital customers to Wynn Las Vegas and Encore Boston Harbor. So we're not calling the EBITDA breakeven point yet. But I mean, if you look at our numbers, we're getting pretty close.

Craig Billings :

Look, we're focused -- the type of design and development that we do, you can't spread yourself too thin. So we're very focused right now on the UAE and getting that right. It's a tremendous, very high return opportunity for us we expect. And so that's really the sign of our -- that's really the focus of our design and development efforts at the moment.

Daniel Politzer :

So in Las Vegas, you talked a little bit about the programming benefits and going forward, how should we should be thinking about that. As you think about -- along with that, the group and convention business coming back and into 2023 and the occupancy uplift, is it fair to give you guys that full 5 points credit going forward starting next year? Or is that something that's going to be phased in more gradually?

Daniel Politzer :

Understood. And then in terms of capital allocation, you're set to receive the proceeds from the Encore Boston sale leaseback in the fourth quarter. How -- did that change your thinking in terms of allocating capital or in terms of how much you're buying back in terms of stock or maybe even a special dividend?

Operator:

The next question is from Robin Farley with UBS.

Craig Billings :

Yes. I mean we -- sure, Robin. So we are all about gateway cities, marquee developments, battleship assets. And so yes, we're always interested in locations like New York. The devil is in the details, of course, when it comes to what the upfront license payment ends up being, what the tax rate ends up being, what the detailed regulations end up being. But yes, of course, we're interested in New York as has been reported in the press.

Craig Billings :

I think it's been reported that we are working with related which is Hudson Yards.

Craig Billings :

It's really dependent on the process. The RFP has yet to drop.

Operator:

Our final question is from Brandt Montour with Barclays.

Craig Billings Wynn Resorts, Limited – CEO, Treasurer & Director:

Well, look, I'll take this one, Julie. So first, you have to think back to our experience during COVID and kind of work forward. So as we emerge from COVID, we were forced actually to become much more disciplined in terms of how we looked at costs. Now we have always delivered the best guest experience in the business. And the challenge that we had was making sure that we continue to do that, but frankly, on a lower FTE count. And we've carried that on. So we're down FTEs relative to '19, even in this quarter and even in last quarter, when we printed nearly $240 million in EBITDA. So when you look at our OpEx per day now, a lot of it is variable and directly related to revenue. To your point on inflation, inflation works two ways in our business, right? The price of a hotel room can be adjusted every minute of every day. And that's one of the benefits of a business like ours. And so we feel good about our ability to manage labor costs. Now we have a portion of our business that's and that's true of everybody -- all the major players other than one up and down the strip. And so that's an important consideration. But we're not staying up at night doing about the cost of labor And in fact, a vast majority or a large number of positions in our building are tipped and folks that are tipped, where else do they want to work, you want to be here. So we feel great about our margins. Again, we don't manage quarter-to-quarter to a particular margin we manage our FTEs with discipline, and we try to maximize the revenue and maximize our delivery on the brand promise.

Craig Billings :

Brian, do you want to take that?

Craig Billings :

We've been more than able to fade any minor fallout that we've seen from tech, mortgage, et cetera, et cetera.

Julie Cameron-Doe :

With that, we will now close the call. Thank you, operator, and thank you, everyone, for your interest, and we look forward to talking to you again next quarter.

Julie Cameron-Doe:

Thank you, operator, and good afternoon, everyone. On the call with me today are Craig Billings and Brian Gullbrants in Las Vegas. Also on the line are Ian Coughlan, Linda Chen, Frederic Luvisutto and Jennie Holiday. I want to remind you that we may make forward-looking statements under safe harbor federal securities laws, and those statements may or may not come true. I will now turn the call over to Craig Billings.

Julie Cameron-Doe:

Thank you, Craig. At Wynn Las Vegas, we generated an all-time quarterly record of $226.7 million of adjusted property EBITDA on $561.1 million of operating revenue during the quarter. Higher than normal hold positively impacted EBITDA by around $6 million in Q2. Our hotel occupancy was 90.5% quarter, up 40 basis points versus Q2 2019. Importantly, we stayed true to our luxury brand and continue to compete on quality of product and service experience with our overall ADR reaching $460 during Q2 2022, 38% above Q2 2019 levels. Our other non-gaming businesses saw broad-based strength across food and beverage and retail, which were also well above pre-pandemic levels. . In the casino, our Q2 2022 slot handle was 63% above Q2 2019 levels, and our table dropped was 28% above Q2 2019 level, despite still suppressed international plays during the quarter due to COVID-related travel challenges. The team in Vegas has done a great job of controlling costs without negatively impacting the guest experience, delivering adjusted property EBITDA margin of 40.4% in the quarter. On a hold-normalized basis, our EBITDA margin was up over 1,200 basis points compared to Q2 2019. OpEx, excluding gaming tax per day was $3.5 million in Q2 2022, in line with Q2 2019 levels despite a 21% increase in revenue due to lower head count and broad-based cost efficiencies in areas that do not impact experience. We remain committed to maintaining our cost structure that appropriately balance the market on our service standards. In Boston, we generated adjusted property EBITDA at $63.7 million through 2022, with EBITDA margin at 13.3%. We saw broad-based strength across casino and non-gaming. In the casino, we generated $181 million of GGR, a property record with strength across both tables and slots. Our nongaming revenue grew 78% year-over-year with particular strength in the hotel, driven by 94.1% occupancy and a $309 ADR. As Craig noted earlier, Q2 strength continued into Q3 as consumer spending on the unique experience remains strong. We stay value disciplined on the cost side with OpEx, excluding gaming tax per day of approximately $1.1 million in Q2 2022. This was a decrease of approximately 13% compared to $1.3 million per day in Q4 2019 and up modestly relative to Q1 2022 on higher revenue and higher payroll. As we've previously foreshadowed, contractual loan group reman added around $45,000 per day for our OpEx base beginning late in the quarter. We are well positioned to drive strong operating leverage as we continue to grow the top line over time. Our Macau operations, we delivered a EBITDA of $90.3 million in the quarter on $117.2 million of operating revenue as the COVID situation in the region has continued. As Craig noted, lower-than-normal VIP holds negatively impacted our EBITDA by around $8 million in the quarter. Businesses remained challenging into Q3 as local COVID outbreaks in Macau do the shutdown of integrated resorts for nearly two weeks during July. Despite the closure, our quarter-to-date EBITDA burn was approximately $1 million per day, in line with Q2. Our OpEx, excluding gaming tax, was approximately $1.9 million per day in Q2, a sequential decrease compared to $2.1 million in Q1 2022. The team has done a great job remaining disciplined on costs in a difficult operating environment. Longer term, we're well positioned to drive strong operating leverage as the business recovers over time. . Turning to Wynn Interactive. In Q2, the business generated approximately $704 million in total turnover, a decline of 3% sequentially versus Q1 due to a seasonally weaker for calendar. Decreases in marketing expense and other OpEx drove an improvement in our EBITDA burn rate of $21 million in Q2 2022 from $31.5 million in Q1 2022. Moving on to the balance sheet. Our liquidity position remains very strong with global cash and revolver availability of approximately $3.1 billion as of June 30. This is comprised of $1.3 billion of total cash and available in Macau and $1.7 billion in the U.S. These numbers exclude the $500 million intercompany revolving credit facility, Wynn Resort and Wynn with Wynn Macau, which further bolsters our already strong liquidity position in Macau and highlights the continued confidence we have in the long-term prospects for that business. Our previously announced sale leaseback transactions at a real estate Encore Boston Harbor remains on track for a Q4 close. Pro forma for the transaction, we have approximately $4.7 billion of consolidated global cash and liquidity. Importantly, the combination of very strong performance in Las Vegas and Boston with the property generating trailing 12-month EBITDA of just over $1 billion together with our robust liquidity creates a very healthy pro forma domestic leverage profile. Finally, our CapEx in the quarter was $90 million primarily related to the Wynn Las Vegas room remodel and the set renovation. With that, we'll now open up the call to Q&A.

Carlo Santarelli:

Obviously, the booking pace on group remains pretty solid in Las Vegas. And clearly, there's a lot of pent-up demand for that. With the experience of now taking on bookings and hosting groups in the new facility. As you guys look out to 2023, what do you believe to be kind of the tailwind from an occupied room night perspective or an occupancy perspective? As well as perhaps what impact that might have on kind of the margin profile of the property with the presumably added occupancy?

Brian Gullbrants:

Sure. Our sales team here at Wynn Las Vegas continues to just do an outstanding job, building a really strong base of business for our future. The second half of '22 that we're into now is ahead of pace and '23, we see quite strong. Just to give you a bit a sense of how we're doing the cumulative group bookings in the first half of '22 were 40% above the first half of '19. So the team just continues to build that solid base from which I think we can effectively yield-manage our rooms better next year and as we move into the future.

Craig Billings:

Well, we -- it's a great question, Carlo. We've already scaled back our allocation to some of the lower profitability channels. That's obviously the first thing you do any time you're yield managing. And it's a little bit of a rich man's problem now as we think forward because we have a very healthy casino business, as you saw in the numbers, and we have a very healthy group. So we're attuned to how we optimize that mix, and we'll be doing that over the course of the next couple of quarters. So stay tuned on '23, but we recognize a lot to call it an issue, it's actually an opportunity. We recognize the opportunity, and we will take advantage of it.

Joe Greff:

I have two questions. One is another similar question on group in Las Vegas. When you look at next year, Craig, what are you targeting in terms of percentage of room nights related to the group segment? And then how much of that is on the books now? And how much of the strategy is in the period for the period going forward on group given the seemingly upward movement in ADR Rock Group?

Brian Gullbrants:

Sure. I think as we look at it right now, we're pacing to a normal percentage of around roughly 30%. We continue to excel. As far as where we are for next year, we're slightly ahead of where we should -- where we normally are. So we're very confident that we'll hit the number we need to and it continues to contribute to our bottom line in base.

Joe Greff:

One thing that maybe surprised us looking at your earnings release tonight, Craig, was the buyback activity. Can you talk about that and how much of your capital allocation going forward is going to be buyback activity, assuming share price levels at or around these levels?

Operator:

Our next caller is Shaun Kelley with Bank of America. You may go ahead.

Craig Billings:

Sure. I'll start and then Brian will jump in. So this started really back in 2019. So you've heard us talk about before our reconstitution of our database strategy. We've made a bunch of changes in hosting. We launched Wynn Rewards. So really going into the reemergence of COVID, we had reoriented our casino strategy, and I think it shows. At the same time, we've been very relentlessly reinvesting in the property in Las Vegas despite COVID, in the rooms, in the food and beverage, and amenities, and it shows and customers notice it. And so yes, we are taking share, and I'm incredibly proud of the team for doing that. Brian, do you want to give a little bit of incremental color qualitatively on July?

Craig Billings:

And Shaun, we acknowledge trees don't grow to the sky, right? I mean you're seeing this in all your Las Vegas names. But as I said in my prepared remarks, we watch the data daily, right? We don't have to look in Las Vegas. We don't have to look after 10 properties. We look after one. And we know everything that's going on in this building. And as I mentioned in my prepared remarks, we don't see, so that's where we are.

Craig Billings:

Sure. You're right. August is usually pretty weak in Las Vegas. I think that's probably true or I shouldn't think pretty weak, relatively weak, particularly given the quarter that we've just experienced. So August is usually a pretty slow month. Groups come back in September, and you start to see an increase in occupancy. I talked about the occupancy shifts that we would expect over the course of Q3 in my prepared remarks, and we stand by that. So business is good. In fact, it's really good. But you always see seasonality in the quarter. You can go back and look at historical Q2 to Q3 movement from an EBITDA perspective in percentage terms. And I think you will see seasonality.

David Katz:

I was hoping for some insight around Interactive. Given that Massachusetts is moving forward, we do observe that there was a little bit of movement and the loss in the quarter. What are your updated thoughts there? Would the burn go up a bit, given that Massachusetts becomes an opportunity on home turf will take it all?

David Katz:

And if I can just follow up, does the promotional landscape that you noted, enable you to consider going back to other states where you don't have a land-based presence or regrowing the business? Or should we really just be thinking about Massachusetts for the moment?

Operator:

Our next caller is Dan Politzer with Wells Fargo. You may go ahead sir.

Craig Billings:

Well, look, we generated operating leverage all over the building over the course of really the past three or so quarters. And I'm incredibly proud of the team for doing that. If you look at our rates, if you look at what we've done in food and beverage, really every nook and cranny driven operating leverage. So what you're seeing is that really the culmination not of aggressively reducing FTEs or negatively impacting the customer experience but rather pricing. And so we go as -- with that in mind, we go as pricing is, right? And so I'm loath to pin a margin and forecast whether we can maintain a 40% margin, an incredibly healthy margin because what we won't do is gut staffing and degrade the customer experience to even if there is a modest recession. We just don't do that. We're thinking about our brand over a 20-year term, not over a quarter. So I'm allowed to pin a particular margin, but what I can tell you is that the team here is very appropriately managing staffing. We're probably down about 10% from pre-COVID levels. yet our customer satisfaction scores are up, and we are pricing our product appropriately based on the quality of product.

Craig Billings:

Well, what we have consistently said is that we'll be driving down the burn each quarter. Now Massachusetts, as I mentioned earlier, I think, to David's question, Massachusetts could change that. But I don't imagine it materially shifting. So it's really kind of immaterial in the grand scheme of things. And so I wouldn't -- I wouldn't spend a bunch of time and brand damage trying to forecast it. The trend should be down with the exception of a few quarters that we might do some user acquisition in Massachusetts as the market opens.

Brandt Montour:

So in Las Vegas, I was hoping you could just talk about international inbound visitation? And maybe walk us around the globe, where you think you have the most sort of mix during normal times? We obviously have our assumptions. But if you could just walk us around the globe and talk about where you think you're going to see upside near term, medium term, long term? And how much of upside we could sort of see here?

Brian Gullbrants:

Sure. We've definitely seen a pickup in the international clientele, both from the gaming and nongaming side of our business. Obviously, Canada and Mexico are the first ones that have popped up. We're seeing great traction in the U.K. now. In fact, just came out of a meeting with the LVCVA and the lift out of London is actually at 106% now of what it was in 2019 pre-COVID level. So it means U.K. is back. The biggest opportunity for us moving forward is obviously China. We're not seeing -- it's anemic at this point, and that's all what you all know out there. So right now, our biggest upside is China. We are seeing other Asian business come back, but not to the extent we'd like. So I'm optimistic about what's in the future, and we got a lot of upside, I think, at some point.

Craig Billings:

I'll start, and then I'll ask Ian to provide his thoughts as well. Not really. I mean we understand and appreciate what Macau is trying to achieve, diversifying the market, both in terms of the geographic origin of visitors and their motivations to visit is not a process that happens overnight. In Vegas, it took many years, and it was a concerted effort by both government and business. We were instrumental in leading that change here in Vegas, and we will, of course, continue to play our part in Macau's journey to do the same. Ian anything you would add, in particular, on the tender requirements?

Julie Cameron-Doe:

Okay. Operator, we'll take one last question.

Robin Farley:

Two things just to clarify that you've talked about it a little bit already. One was just for group for '23, what's your booked position or kind of room nights booked compared to 2019 at the moment for '23? It sounds like there was a lot of acceleration in the first half. I'm just wondering where that kind of you booked for '23.

Brian Gullbrants:

Sure. We are ahead of both '19 and obviously '21 and we continue to pick up. We're not going to need to pick up much in the year for the year as we are focused on moving forward with actually a higher number. So we'll have -- we're hoping the highest number of group rooms we've ever had because of the expansion of the convention center we had a couple of years ago. So really starting to grow into that space and take advantage of it. It also allows us with a slightly larger base to yield a little bit better our rates as we move forward into the year. So all encouraging but certainly better than '19 and '21.

Craig Billings:

Sure. we learned to run the business differently before COVID. We've talked about this before. And we completely reevaluated how we do that. And so we are running, I mentioned earlier on about 10% less FTEs than pre-COVID. And we're doing it in an absolute range of the market and stand our customer satisfaction scores are going up. So that's a real testament to the team. So I would consider that at this point, permanent. The operating leverage that we were able to obtain out of the business units, look, as you well know, room prices fluctuate with supply and demand. So you can have positive operating leverage -- deleveraging operating leverage in rooms in a week's notice. On the food and beverage side, I suspect some of it's sticky. I mean, inflation is what it is, and we've been able to drive a decent amount of operating leverage out of the food and beverage portion of the business. So it's a little bit of a mixed bag. But Robin, I guess what I would say is the FTE count is what it is.

Craig Billings:

Thanks, everybody.

Julie Cameron-Doe:

Thank you, Operator, and good afternoon, everyone. On the call with me today are Craig Billings and Brian Gullbrants in Las Vegas. Also on the line are Ian Coughlan, Linda Chen, Ciaran Carruthers, Frederic Luvisutto, and Jenny Holaday. I want to remind you that we may make forward-looking statements under Safe Harbor Federal Securities laws and those statements may or may not come true. I will now turn the call over to Craig Billings.

Julie Cameron-Doe:

Thank you, Craig. First of all, it's a privilege to be here and I'm delighted to be working with Craig again as well as with his talented team. Turning back to the business. At Wynn Las Vegas, we generated $159.4 million of adjusted property EBITDA, on $441.2 million of operating revenue during the quarter. Overall, our hotel occupancy was 77% in the quarter, with 62% occupancy in January, improving to 91% in March. Importantly, we've stayed true to our luxury brand and continue to compete on quality of product and service experience with our overall ADR reaching $432 during Q1 2022, 28% above Q1 2019 levels. Our other non-gaming businesses saw broad based strength across F&B and retail, which were also well above pre-pandemic levels. In the casino, our Q1 2022 slot handle was 49% of Q1 2019 levels, and our table drops was 36% of our Q1 2019 levels, despite still suppressed international play due to COVID related travel challenges. The team in Vegas has done a great job of controlling costs, without negatively impacting the guest experience, delivering adjusted property EBITDA margin of 36.1% in the quarter. This was up 1,100 basis points compared to Q1 2019 on a hold-adjusted basis. OpEx excluding gaming tax per day was $3 million in Q1 2022, approximately $160,000 per day below Q1 2019 levels due to lower headcount and broad-based cost efficiencies in areas that do not impact the guest experience. We remain committed to maintaining a cost structure that appropriately balances margins and our exacting service standards. In Boston, we generated adjusted property EBITDA of $55.2 million in Q1 2022 with EBITDA margin of 29%, driven by strength across the casino in both slots and tables. Consistent with our regional peers, Omicron along with bad weather, temporarily disrupted our performance at Encore Boston Harbor in January. But as Craig noted earlier, we exited the quarter generating EBITDA in March that was 60% above January. We've remained very disciplined on the cost side with OpEx excluding gaming tax per day of approximately $1 million in Q1 2022. This was a decrease of over 20% Compared to $1.3 million per day in Q4 2019, and flat relative to Q4 2021. Looking ahead, as we noted last quarter, we expect OpEx to increase modestly due to higher payroll related to contractual labor agreements coming into effect in Q2, which will add around $45,000 per day to our OpEx space. We are well-positioned to drive strong operating leverage as we continue to grow the top line over time. Our Macau operations delivered an EBITDA loss of $5.5 million in the quarter on $298.4 million of operating revenue, as the COVID situation in the region has continued to suppress demand. While business in Q1 was challenging, we remain disciplined on cost and CapEx, a prudent approach which positions us to drive strong operating leverage as the business recovers over time. Our OpEx excluding gaming tax was approximately $2.1 million per day in Q1, a decrease compared to $2.2 million in Q4 2021, excluding non-recurring items. Turning to Wynn Interactive. In Q1, the business generated approximately $727 million in total turnover. Top line growth combined with decreases in marketing spend and other OpEx drove an improvement in our EBITDA burn rate to $31.5 million in Q1 2022 from $79.4 million in Q4 2021. Turning to the balance sheet, our liquidity position remains very strong with global cash and revolver availability of $3.4 billion as of March 31. This was comprised of $1.5 billion of total cash and available liquidity in Macau, and $1.9 billion in the U.S. Pro forma for the sale leaseback transaction we announced in February, we have approximately $5 billion of consolidated global cash and liquidity. Finally, our CapEx in the quarter was $96 million, primarily related to the Wynn Las Vegas room remodel and the theater renovation. With that, we will now open up the call to Q&A. Operator?

Carlos Santarelli:

Hey, guys. Good afternoon and thank you for the remarks. Craig, Julie, whoever wants to kind of handle, I was wondering [technical difficulty] Las Vegas, especially on the room side have been incredibly strong. Can you guys talk a little bit about how from an ADR comparison perspective relative to kind of the first quarter of '19 period? The cash versus comp mix has changed?

Brian Gullbrants:

Yes, sure. We really -- if you look at the Omicron wave really impacted our first quarter, specifically in January, we've also had a higher group mix, which previously contracted rates as adjusted the rate and impacted the rate slightly. But our March ADR has come roaring back and it's certainly above '19 levels. So there really hasn't been much of a macro impact. With respect to '19, we continue to grow rates significantly. And as far as volumes, we're right on pace with '19 volumes.

Carlos Santarelli:

Right. Craig, and to the point I was actually kind of moving towards or driving at, just in terms of kind of the customer that you're seeing and kind of cash comp mix speaks to it. But is it still like kind of as it was, which is kind of the same customer from 2019 is spending more? Or are you starting to see kind of different channels, different customers that are coming in and kind of contributing to the mix? And maybe those customers weren't previously in your loyalty program and not necessarily previously casino guests?

Carlos Santarelli:

Understood. Thank you, guys.

Operator:

Our next question is from Joe Greff from JPMorgan. Go ahead. Your line is open.

Joe Greff:

Good afternoon, everybody. Hello, Julie. I have a similar question to Carlos on room rates on the Las Vegas. Can you talk about the group mix in the 1Q and the anticipated group mix for the balance of the year? And kind of where I'm going with this, Craig is, as group becomes a bigger, presumably a bigger proportion of the total for the rest of 2022, does that have an impact on how you can yield on an overall blended rate basis for the portfolio, given some of the group that might be coming back from years prior at contractually lower than market rate right now in the last three quarters, all kind of round up for the third quarter of '22, I mean, you're at $400 ADR, or above. Is that sustainable, if you have a higher proportion of group mix?

Brian Gullbrants:

Sure. We've really continued to improve pacing. In fact, right now, we're actually pacing above '19 levels on the group side. We had a little bit of a low with Q1 in booking pace because of the short-term impact of Omicron. But it has come roaring back. And now we have I think, substantial pricing opportunities as we move forward in the other segments due to the strong base. In fact, one of the strongest bases we've ever seen.

Julie Cameron-Doe:

Sure. Hi there. I will take that. It's Julie here. So as I mentioned in my prepared remarks, we spent $96 million in the quarter, which was primarily in Las Vegas on the room remodel and the renovation of the theater. We've got about $50 million to $60 million left on the room remodel and that should complete in June. We've got around $55 million to $65 million to come on the theater renovation. And that should open in the fall. We're really excited about the show and we expect it to be a great revenue driver in the fourth quarter. In addition, in terms of maintenance CapEx, we're looking at around the $75 million to $85 million annually in Vegas, and $25 million to $35 million annually in Boston. And that's really the maintenance CapEx. In terms of Macau, I mentioned in my prepared remarks, our prudent approach in Macau to OpEx and CapEx, given the operating environment there. And so what that means from a maintenance CapEx perspective is we're looking at approximately $10 million per quarter across both properties. We'd see that returning back to normal levels as the market comes back there.

Craig Billings:

Thanks, Joe.

Shaun Kelley:

Good afternoon, everyone. And, Julie, welcome to the call. My question would just be about margins, if we could start there. Thinking about the domestic properties, obviously, it seems like at both Las Vegas and Boston, you saw material sequential improvement. Can you just help us think about margin leverage you were able to see your drive as the quarter progressed? I mean maybe not specific numbers, but just directionally, did those exit rates were those on par with or materially better than what kind of the quarter as a whole did? Just to give us a sense of kind of how to think about the balance of the year or at least the second quarter.

Shaun Kelley:

Great. And then as my follow-up, just if we could -- could you give us the latest thinking or parameters around how online piece or when Interactive should progress as we move through the year? Just what are the thoughts around losses. I know they actually materially -- they came in materially below what we were expecting for the quarter and obviously, a very big sequential improvement. So just any guidelines or parameters there as the year progresses would be helpful.

Shaun Kelley:

Thank you very much.

Operator:

Next question is from David Katz from Jefferies. Go ahead. Your line is open.

Craig Billings:

Yes. Thank you for the question. So this is really a business of building player cohorts, right? Every day, you're out acquiring customers. And you build those player cohorts. Those player cohorts age out over time, and they deliver EBITDA to you. So what we're focused on is continuing to build our player base and age those -- that player base out and ultimately drive operating leverage out of the business and build the business. The next step for us in light of real uncertainty in the market with respect to user acquisition behavior is to get to the EBITDA breakeven point. And then longer term, there's really two primary catalysts for us. The first is Massachusetts, which, as I mentioned, is hopefully pending with a bill that we anticipate will be signed by the governor if it emerges from the reconciliation process. And then of course, any additional online gaming states where we feel like we have a distinct advantage based on brand. So it's really too early to talk about market share targets or EBITDA targets. I think the focus for us is recognizing the ultimate potential total addressable market, our position in that market and reaching that total addressable market in a prudent way that is ultimately shareholder friendly. So stay tuned.

Craig Billings:

Well, look, we opened that property and it opened initially very soft. And we went to work very, very quickly as we generally do to turn that property around. And with both Brian and Jenny's extremely good work, we've been very successful. So we're run rating in the mid-200s at this point. And we feel like that's quite an accomplishment in light of the environment certainly that we went through during COVID. The next stage for growth in that business is really two things

Operator:

Our next question is from Thomas Allen. Go ahead. Your line is open.

Craig Billings:

I can't -- Thomas, this is a great question. I can't really opine on what the other Emirates may do with regard to legalization. That's really in their hands. But I would point out that we not only compete but actually punch well above our weight in the most competitive market in the world, Las Vegas. So we don't really -- our underwrite of that opportunity presume that there would be competition, but I can't tell you that we know of any now. But it's not within my purview to forecast what the Emirates may do -- what the other inlets may do.

Craig Billings:

Yes, sure. Actually, winter, if you look particularly at Q4, winter in Boston proved to be pretty substantial for us, right, because everyone is inside as opposed to out given the environment in winter in Boston. So we're still feeling out seasonality, to be honest, even in the midst of 2021. We were still a little bit touch and go with COVID. But certainly, we had a very, very strong winter there. And seasonality in Vegas is as you would expect. You know this market extremely well.

Operator:

Next question is from Robin Farley from UBS. Go ahead. Your line is open.

Craig Billings:

Thanks, Robin. Yes, we are interested in any gateway city that is conducive to the scale and quality of development that Wynn Resorts does. So we are interested in New York, and we are active there, but not in a position yet to talk about anything in particular.

Craig Billings:

Well, Julie, touched on this earlier in a very quantitative fashion. What I would say qualitatively is we're constantly balancing our FTE, our full-time employee count against our own standards and our customer standards for quality. And thus far, we've been very successful at doing that. So we announced -- I think it was this time last year, we announced some permanent cost saves, and we're adhering to those. At the same time, with the business really, really coming back, we are driving a tremendous amount of operating leverage, but with that comes some incremental variable costs. So we are not -- we don’t really guide -- you know us well, Robin. We don’t really guide to margins or forward-looking numbers. What I would say is that there is a chunk of cost savings that have occurred over the course of the past several years that are absolutely permanent. And beyond that, you'll see fluctuations based on variable costs, which means it's heavily, heavily tied to whatever revenue level we are doing.

Brian Gullbrants:

We're actually -- thank you. We are actually pacing ahead right now for '23 as well. So we feel very confident in where we are. Pending all that's going on in the world right now, everything is looking pretty good.

Brian Gullbrants:

Sure.

Operator:

Our next question is from Stephen Grambling. Go ahead. Your line is open.

Craig Billings:

Thanks, Stephen. I'll start, and then I'll ask Ian to comment as well. I said this on the last call, Macau is really the most fascinating aspect of our portfolio right now. And the market -- the equity markets obviously aren't appreciating that, but that's fine. That happens from time-to-time. We started a journey towards being a very, very good, very aggressive mass marketer with the opening of Palace. And we are pretty good at it. If you look back at '19, some 80% plus of our EBITDA in Macau came from sources other than VIP. And so we're really proud of that. So we feel very well equipped to compete just in general with the reopening of the market. The market obviously is going to reopen as a more mass-centric market and with the best product and the best service in the market. We feel good about our ability to compete. What I find fascinating is we've seen throughout the course of COVID, we've seen new customers come to Macau, different customer motivations than perhaps historically we've seen, shopping motivation, leisure motivation, things like that. Part of the reason that that's the case is because Hong Kong hasn't been accessible. And that really piques our interest when we think about what the future development of Macau might be from a non-gaming perspective. Now we are under no illusion that we are talking about a Las Vegas style nongaming market. It's just a very, very different dynamic there. But the ability to adapt and change our business as the market changes and adapts or even lead that, which we've historically done here in Las Vegas is something that I personally find both fascinating and a very, very interesting investment -- incremental investment opportunity. Ian, would you add anything?

Craig Billings:

And you -- sorry, Stephen, you also asked about junket space. So I -- we think about it differently at each of the two properties. At the downtown property, where I anticipate that -- where we anticipate that the core customer motivation will be gaming over the longer term, we have some prime real estate in the form of former junket space that we think will be incredibly competitive in mass. Palace is a little bit of a different story because we may have the opportunity to do some more unique things there, some longer-term more blue-sky thinking. We are obviously not making that investment now. But we certainly have the real estate to do it. And we'll take advantage of that when the time comes.

Craig Billings:

Yes, sure. This is one of those topics. We have them every couple of calls, where the sell-side tends to really under-appreciate nuance [ph] and instead paints with a very, very broad brush. The reality is that we haven't accrued for any material exposure and each individual claim comes down to a really detailed analysis around clear proof of a deposit in your particular property, the statute of limitations on a claim in a number of other very, very nuanced legal points, we don't expect material exposure at this time.